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Obama backs closer ties with Burma

President Barack Obama has declared a new chapter in US relations with Burma, easing an investment ban and naming the first US ambassador to the former pariah state in 22 years to reward it for democratic reforms.

Both Republican and Democrat senators welcomed the administration's move, but human rights activists said it was premature to reward a government that remains dominated by its military and still holds hundreds of political prisoners.

Burma opposition leader Aung San Suu Kyi's election to parliament last month has prompted Western governments to roll back years of hard-hitting restrictions against the Asian nation also known as Burma, which is emerging from decades of authoritarian rule and diplomatic isolation.

After meeting Burma's foreign minister, Wunna Maung Lwin, Secretary of State Hillary Clinton said that the US was suspending sanctions on export of American financial services and investment across all sectors of the Burmese economy - including in the resource-rich country's lucrative oil, gas and mining sectors.

She described it as the most significant action Washington has taken so far to reward Burma for its reforms.

"Today we say to American businesses, Invest in Burma and do it responsibly," she told a joint news conference after talks with the foreign minister at the State Department.

She said US companies would be expected to conduct due diligence to avoid any problems, including human rights abuses.

Despite the easing of restrictions, US companies would still be barred from doing business with firms associated with the country's powerful military.

The White House also announced it was keeping its framework of hard-hitting sanctions in place for now, saying Burma's democratic reforms are still "nascent". Mrs Clinton described that as an "insurance policy".

Derek Mitchell, the current special envoy to Burma, will become the first US ambassador to be based in the country since 1990.

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