A little over five years ago Helen Clark postponed trade talks with Myanmar, saying the ruling military junta's violent crackdown on monks and other demonstrators was ''unacceptable.''
Myanmar was New Zealand's formal ''dialogue partner'' with Association of South-East Asian Nations (Asean).
The Government's principled stance set New Zealand's relationship with the trade bloc back at least 18 months. According to leaked cables, officials were even ordered to look at changing domestic law to allow for sanctions without a UN resolution.
On Wednesday, after more than two years of political and economic reform, the South Eastern Asian nation, will welcome John Key, the first New Zealand prime minister to pay a visit. A reciprocal trip by President Thien Sien is expected next year. Mr Key will officially refer to the once pariah state as Myanmar - ''a plain and simple acknowledgement of the dramatic progress that they've made,'' Foreign Minister Murray McCully explains.
The visit is designed to encourage the transition to democracy, embarked on by Thien Sein after 2010 elections ended five decades of oppressive military rule. This week Barack Obama will also make the first visit by an American president.
Thien Sein's ambitious reforms include the releasing of political prisoners, legalising protests and trades union, and overturning strict censorship.
The changes are set to radically transform the impoverished nation of 60 million - particularly a new business-friendly foreign investment law, passed earlier this month. Many have described the momentum to rebuild the country's non-existent infrastructure as ''a gold rush''.
It is strategically placed in the world's fastest growing region, on crossroads between India, China and Thailand. It has huge reserves of jade, pearls, rubies and sapphires, as well as teak, and oil and gas. There are only a handful of ATMs, accessible only by locals - and large purchases are made with fistfuls of pristine US dollars. But a deal with Visa is set to overhaul the largely cash economy. Myanmar needs telecommunication and agriculture expertise. Fonterra already does $18 million worth of business with the resource-rich nation.
''In terms of economic growth, there are opportunities there for New Zealand companies - but probably large companies initially because it is quite a challenging environment,'' Mr Key said. ''It's got a larger population than Thailand. It's quite arable, from an agriculture perspective there are a lot of opportunities there.''
Within decades it could be a powerful economy.
Mr McCully, who met Foreign Minister U Wanna Maung Lwin in March, said New Zealand has plenty to offer. ''What they want most from New Zealand is agricultural expertise. This is a country that used to be regarded as the food bowl of South East Asia. It's got a great climate and soil and it sits between India and China, two massive markets, so it's not rocket science to see what the potential is.
''They also want scholarships, education, particular focused around agriculture.''
However, as Myanmar embraces the free market and begins to prosper, New Zealand has a role to play in ensuring its people are not exploited.
''I think we need to acknowledge that this is still one of the poorest countries on the planet,'' Mr McCully says. ''But my own impression is that investment is capable of generating a considerable improvement in the fortunes of Myanmarese people in the next few years. We need that investment to be designed to promote positive outcomes for them.''
Kiwi Ross Wilson has been working in Yangon for the past five months. Chief technician for the UN's International Labour Organisation, he is heading a freedom of association project. He has raised concerns that new labour laws need to be properly enforced. But building a new industrial relations system and institutionalising democratic principles would have been unimaginable two years ago.
''It's quite amazing what has happened here. The pace of change is very rapid. And that is a bit of a problem, and the resources, including the human resources, are limited.
''I think the extractive industries in particular are a bit of a concern, they are a mixed blessing for any country. There has been quite a lot of discussion here about how the general population is protected against undesirable foreign investment...we haven't faced the reality of that yet.''
But Mr Key's visit is timely, Mr Wilson believes.
''I think there are ways the governments who have previously been critical or stand-offish, quite rightly, can now actually assist. It's very appropriate for the Prime Minister to come and signal both an interest in helping and an interest in engaging in trade and other respects.
''Although the international community is firm that more reforms are needed, Mr Key believes progress is ''not perfect but it is genuine.''
The general feedback that I get from other Asian leaders is that we can take a lot of confidence from the progress they are making. They are confident that over time it will go from strength to strength.''
Even sceptical Labour MP Maryan Street, who returned from a visit to Myanmar last week, is convinced by the reforms.
''I came away absolutely persuaded that the minister and officials I met are committed to helping their people,'' she said.
Mr Key will not duck human rights issues, particularly the freeing of political prisoners and ethnic tension in the western state of Rakhine. He is also due to meet famed opposition leader and freed political prisoner Aung San Suu Kyi.
''There are obviously the challenges with the ethnic minorities and there human rights issues there. But Aung San Suu Kyi has been quite conservative with her language and accepting of the enormity of the tasks.''
For five decades Myanmar was ruled by an oppressive military junta. Cut off from the rest of the world, the junta was unmoved by international condemnation and sanctions.
The population was subjected to appalling human rights abuses such as forced relocation and child labour. The military was also suspected of exporting heroin on a mass scale, and none of the country's natural wealth reached its residents. Pro-democracy protests in 1988 were brutally crushed.
But two years ago Myanmar's generals stepped back and the first elections in 20 years were held. The polls were declared as unfair and President Thein Sein - a former junta general - was installed as prime minister. Seats in both parliament and key ministerial positions were reserved for the military.
However, opposition leader Aung San Suu Kyi was released from 15 years of house arrest and thousands of other political prisoners freed. In landmark by-elections this March her National League for Democracy party won 43 out of 45 years.
As a result American financial and EU sanctions were dropped, US Secretary of State Hillary Clinton visited in December 2011 and the Asean has announced Myanmar will chair the grouping in 2014.
- © Fairfax NZ News
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