REPORTING FROM NEW DELHI -– At one level, Sunday's by-election in Myanmar is relatively insignificant. It involves just 43 of parliament's 664 seats. The military's guaranteed control won't change. And the biggest headline, that opposition leader Aung San Suu Kyi will be elected, is all but a foregone conclusion.
At another level, however, it's a crucial milestone for long-isolated Myanmar, also known as Burma, as it tries to convince the world that its reforms are genuine and its is deserving of an end to U.S. and European economic restrictions.
"There's an awful lot at stake," said Sean Turnell, an economics professor at Australia's Macquarie University and editor of Burma Economic Watch, a website. "It's a real signpost for the U.S. and countries around the world."
Among the issues Western governments are expected to focus on in evaluating the results include: How clean was the election? How many opposition politicians were elected? How broad-based is Suu Kyi's popular support? And how welcoming is parliament, dominated by soldiers and ex-military brass, toward newly elected pro-democracy lawmakers?
And they'll continue to evaluate progress on broader political reform, policies toward ethnic minorities, human rights and whether parliament can emerge as a counterweight to the presidency and the military. Many activist groups say the regime continues to move too slowly in these areas.
In many ways, Sunday's election is seen as a trial run for the 2015 general election. If Suu Kyi's opposition party, the National League for Democracy, does well among the 6.5 million eligible voters against President Thein Sein's ruling Union Solidarity and Development Party, the regime, to maintain its grip on power, could sharply limit the number of seats opposition parties can contest in the general election. Alternately, if it embraces reform, Suu Kyi might one day be in a position to stand for president.
The U.S. and the European Union are expected to continue their carrot-and-stick tactics. They're wary of ending sanctions too quickly and losing their leverage even as they seek to reward Myanmar for moving ahead.
Analysts say Europe is likely to move faster than Washington on easing restrictions, perhaps in part to give its companies a head start in the country.
Closely linked with political reform is economic reform, with its promised jobs, housing and better living standards for Myanmar's 50 million people. In a closely watched first step, Myanmar is slated to soon introduce new rules ending its long-standing dual exchange rate system, which has seen the official rate hover around 6 kyats to $1, compared with black market rates of 800 to $1.
This should reduce smuggling and encourage more foreign investment, chipping away at deep-rooted corruption, crippling monopolies, bloated state-run companies and structural inefficiencies that benefitted government officials' cronies and hurt ordinary people.
Myanmar is also expected to soon introduce new rules allowing foreigners to hire Burmese, lease land and avoid having their companies nationalized.
But the country faces a delicate balancing act. If economic change is too rapid, or the benefits are too concentrated among elite insiders, popular protests could lead to a populist outcry and a military crackdown, putting hard-liners back in the driver’s seat.
"If you don't allow genuine competition, the whole reform process could hit a backlash," said Rajiv Biswas, the Singapore-based chief economist with IHS Global Insight, a forecasting group. "Not only locally, but Western countries could say 'This isn't what we envisioned.'"
Suu Kyi accused officials this week of campaign dirty tricks aimed at sabotaging opposition candidates, calling on foreign election monitors to investigate irregularities. Although electioneering has been relatively peaceful, she's faced last-minute permit cancellations at venues where she was scheduled to speak, and other opposition candidates have reported intimidation and harassment.
President Thein is generally seen as favoring reform, and it's assumed the regime sees victories by Suu Kyi's and other opposition candidates as a foregone conclusion, the price of greater global integration.
"The president needs the participation of Suu Kyi and the National League for Democracy to fully convince the world that he is serious about reform," said Morten B. Pedersen, politics professor at Australia's University of New South Wales.
So widespread fraud of the sort seen during a late-2010 election would seem counter-productive, analysts said. More likely is sporadic ballot-box stuffing and vote buying perpetuated by an old guard who personally dislike Suu Kyi or fear her popular policies will undercut their graft potential.
Each passing month makes it more difficult for the regime to force the democratic genie back in the bottle, analysts said, with this election an important step in that momentum.
"Political and economic reforms are starting to put a protective layer around the whole process," said Macquarie University's Turnell. "We can't say it won't be reversed. But now with people having more say, it would be a real fight, compared with six months ago when it could still be turned back with a palace coup."
-- Mark Magnier
Photo: Supporters of Burmese pro-democracy leader Aung San Suu Kyi shout slogans from a truck a day before Sunday's by-election. Credit: Altaf Qadri / Associated Press