Gold palace can't hide Myanmar's poverty

The road to the opulent 100-room Presidential Palace in Myanmar (Burma) is a brand new 16-lane highway - but there are very few vehicles using it.

The massive presidential complex - with its grandiose high ceilings, gold accents and gargantuan chandeliers - paints a stark contrast to the living conditions of the population, with many living on as little as 70 cents a day.

President Thein Sein, who occupies the building in the country's new, purpose-built capital of Naypyidaw, is a former military junta commander-turned-democracy pioneer.

On Thursday, he held bilateral talks with Prime Minister John Key about the country's two-year-old transition toward democracy - and New Zealand's hopes of getting its foot in the door to the blossoming South-East Asian economy.

Mr Key says he is encouraged by Myanmar's progress, and by the part New Zealand can play.

"I'm extremely confident that over the years ahead, whether it's in sectors from mining to tourism, right through to disaster recovery, sharing technology on earthquakes, there's a huge amount we can do with the people of Myanmar."

He announced Mr Sein will visit New Zealand next month, with a focus on viewing how agricultural sectors operate.

Mr Key also announced $NZ6 million in aid funding to build dairy farming capabilities in Myanmar, and $NZ1 million in aid for the Rakhine province through the United Nations World Food Programme, to assist large numbers of Myanmarese forced from their homes by ethnic clashes - emphasising that it is important all of New Zealand's aid contribution trickles down to those who need it.

Mr Sein, who rarely speaks to the media, was happy to address New Zealand journalists, reaffirming through a translator his commitment to Myanmar's transition to democracy.

While decades of sanctions from Western countries have hurt Myanmar's economy, Mr Sein says the country has adopted new foreign investment laws that are "very investor-friendly".

A day earlier, Mr Key was in the former capital of Yangon (Rangoon), where poor residents sat on the dirty kerbs selling shoes and food in front of dilapidated buildings dotted among new high-rises.

Mr Key says Myanmar is far more modern than he had expected.

"If you go a bit further out, the overt signs of poverty are much more explicit there, but here in the city it's quite remarkable."

Although Mr Key praised the country's steps toward democratisation, he also met with opposition leader Aung San Suu Kyi - a Nobel Peace Prize-winning democracy activist - on Thursday, and she assured him there is a long way to go in her country.

"There is a great difference between the privileged and the great majority. The privileged are very few and they are extremely, extremely privileged. The great majority of the Burmese people are still poor," she said.

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