YANGON (Reuters) - Myanmar's military junta made way for a new government on Wednesday, ushering in a new era of civilian rule dominated by the same authoritarian generals who have isolated the country for nearly two decades.
The new parliament, packed with retired and serving soldiers, dissolved the powerful State Peace and Development Council (SPDC), a formality after a national election in November that was widely criticised as a sham.
The end of military rule is seen as a move to attract much-needed foreign investment to a country that just over 50 years ago was one of Southeast Asia's most promising and wealthiest, the world's biggest rice exporter and major energy producer.
It also provides an exit strategy for 78-year-old paramount leader Senior General Than Shwe, who named General Min Aung Hlaing on Wednesday as successor as commander-in-chief, ending months of speculation by signalling his imminent retirement.
With his top allies in key posts in the army and government, Than Shwe has effectively insulated himself from a purge by preventing the emergence of another strongman. Experts agree he is likely to maintain broad behind-the-scenes influence.
Few expect immediate political, economic or social reforms with the same generals, now retired, in control of the country, where 30 percent of the population live in poverty and where botched policies and sanctions have blighted its economy.
Members of the SPDC, as the junta called itself, retained prominent roles with its former members taking posts as president, vice-president, parliament speakers, cabinet ministers or regional chief ministers.
"It's the same old faces. I doubt if they have new brains in their heads. We have to hope for the best," said a retired school principal in Yangon who declined to be identified by name so he could speak candidly.
An unscheduled announcement signed by Than Shwe and read out on state television said lawmakers had approved a new president and 30 ministers for five-year terms.
"The legislative power, jurisdictional power and administrative power being exercised by the State Peace and Development Council has been transferred to the Union level government," it said.
"WINDOW OF OPPORTUNITY"
The historic handover of power after 49 years of direct military rule will be greeted with broad scepticism by the international community and many of Myanmar's estimated 50 million people, most of whom have lived under a succession of army dictatorships.
The international community is expected to seek engagement with the new government after decades of frosty ties with the SPDC. Western sanctions will be in focus although it is unlikely the embargoes, considered a failure by many analysts, will be lifted soon.
Western governments have said they want to see substantive changes before reviewing sanctions, including the release of an estimated 2,100 political prisoners, but experts say a continued hardline stance could alienate the new leadership.
"There is a critical window of opportunity to encourage greater openness and reform. Unfortunately, this opportunity is likely to be squandered," the International Crisis Group said in a report, adding some "countries apply a higher priority in appearing tough on Myanmar than being effective.
"The result will be continued deadlock."
Myanmar's pro-democracy forces have barely any role in the new setup. Nobel laureate Aung San Suu Kyi's National League for Democracy party, which boycotted last year's election in protest, has no official role but is expected to play a significant part in any future review of Western sanctions.
It has sought urgent talks with the new government about a bigger role for pro-democracy forces and a reconciliation process with armed ethnic groups.
"The former military regime does not exist anymore," said party spokesman Nyan Win. "We expect to have dialogue with the new government. The NLD always leaves the door open for dialogue."
(Writing by Martin Petty; Editing by Jason Szep and Jeremy Laurence)
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