SINGAPORE - Myanmar's reduced sentence for opposition leader Aung San Suu Kyi may be an indication the junta is becoming more sensitive to international pressure as it prepares a transition to civilian rule next year, analysts say.

A Myanmar court on Tuesday sentenced Suu Kyi, who has spent 14 of the past 20 years in detention, to three years in jail -- which the junta then immediately reduced to 18 months of house arrest at her lakeside home in Yangon.

The West reacted in outrage, with the European Union preparing a fresh round of sanctions, while China and Myanmar's other neighbors took a more measured response.

The trial came at a time when Western capitals were questioning their strategy toward the generals, given their ineffectiveness in trying to ostracize them or Asia's attempts at engagement.

U.S. Secretary of State Hillary Clinton, on a visit to Jakarta in February, expressed frustration at the failure of both approaches. Imposing sanctions has not influenced the junta... Reaching out and trying to engage has not influenced them either.

Myanmar is a resource-rich country that lies strategically between China and India. The 10-nation Association of South East Asian Nations (ASEAN), of which Myanmar is a member, worries that isolating Myanmar will merely shove it into China's orbit.

Such sanctions don't seem to have much effect on Myanmar because it is a resource-rich country where Asian neighbors compete for everything from timber to oil and gas, said Antonio Rappa, political analyst at the S. Rajaratnam School of International Studies in Singapore.

Singapore is among the top three biggest trading partners and investors in Myanmar, whose ruling generals are believed to park their money and send their children to study in the island-state.

Analysts saw other signs of the junta beginning to become more engaged with the world, such as its acceptance of international aid -- and foreign aid workers -- to help rebuild after a cyclone hit the Irrawaddy Delta in May 2008, killing 140,000 people.

What Myanmar needs is more international contact rather than less, said former ASEAN Secretary General Rodolfo Severino, adding the junta had shown a degree of openness to the international community in the wake of the cyclone that made 2.4 million people destitute.

KANGAROO TRIAL

Debbie Stothard of the anti-junta Alternative ASEAN Network on Burma said the repeated delays in handing down the Suu Kyi verdict, and then the commuted sentence, showed the regime could be swayed by international pressure.

I think what's interesting is we could see that from a fast kangaroo trial, the regime had to delay the trial and impose a lighter sentence because of international pressure, Stothard told Reuters Television.

That would appear to argue for brandishing a stick at the regime, and analysts said it was unlikely the Obama administration would soften its stance following the verdict.

If anything, the result will be to solidify the American policy toward Burma, said Walter Lohman of the Washington-based think-tank, the Heritage Foundation.

The U.S. Campaign for Burma, which has called for a full U.N. arms embargo on the country as a way to press China to stop its support for the junta, and isolate the regime to get it to talk to the opposition, said it wanted both sanctions and engagement.
ASEAN has been reaching out to the regime now for 10 years, the U.N. has sent envoys on some 40 trips -- but clearly engagement without sticks is not working, Campaign's Jeremy Woodrum said.

The junta's move to extend Suu Kyi's house arrest was clearly aimed at keeping her sidelined until the end of next year's planned election. Her ability to mobilize thousands of people for rallies helped her party win 392 of the 485 seats in the 1990 election that was annulled by the military.

The junta is on the final stage of its road map to democracy, culminating in next year's vote, and with a constitution that enshrines a powerful role for the military.

The junta might have become more responsive to international pressure because it may want its new cabinet -- an ostensibly elected civilian one but likely filled with retired generals -- to be acceptable to the outside world, analysts said.

Instead of calling for an election with Suu Kyi's participation, the international community should shift its focus to deal with a post-election Myanmar, they said.

From now until the elections, Aung San Suu Kyi won't be in the picture, said Pavin Chatchavalpongpun of the Institute of South East Asian Studies in Singapore. Why don't we sit down and try to think of policies of the next government?

Than Shwe may be thinking about leaving his legacy behind, Pavin said referring to the junta supremo. Whether he already has a political successor in his mind, we don't know. But I am sure he has been thinking about that.

(Additional reporting by Prapan Chankaew in Bangkok and Paul Eckert in Washington; Editing by Bill Tarrant)

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