BBC Burma analyst in Bangkok
Shunned for years by the international community, Burma is now desperately trying to break out of its isolation.
While China has remained Burma's closest ally, ever since the country's generals seized power in a bloody coup more than 13 years ago, Europe and the United States have maintained limited sanctions against Rangoon because of its terrible human-rights record.
International pressure was stepped up after the pro-democracy party led by Aung San Suu Kyi, the National League for Democracy (NLD) convincingly won the national elections in 1990, but were prevented from taking power by the military.
Burma's generals are on a charm offensive
Former British ambassador
In the past, Burma's military rulers often made a virtue out of the fact that they were internationally isolated. But facing a long-term economic crisis, Burma's military leaders have begun to see the need to open up to the outside world.
A Burmese businessman who did not want to be identified said: "At the very least, Burma's military leaders know they need greater access to international finance, investment and trade if their economy is to develop."
While the West tries to keep Rangoon isolated, the generals are reaching out to its neighbours in East and South East Asia and improving ties with many of its former allies, like Russia, Yugoslavia and Pakistan.
"Burma's generals are on a charm offensive," said a former British ambassador to Rangoon, "and they are effectively chipping away at their international isolation."
Relations with Thailand have improved since PM Thaksin Shinawatra came to power
Burma's military intelligence chief has frequently told United Nations officials that Rangoon is not worried by the West's attempts to enforce sanctions because their Asian neighbours will support them with aid and trade.
This is certainly the case with Burma's closest neighbour, Thailand. A year ago Bangkok and Rangoon were on the verge of a war. Now relations between the two countries are growing stronger all the time.
Thailand is prepared to assist Burma economically, in return for the Burmese stepping up its campaign to stamp out the drugs trade and stem the flow of illegal workers across the border.
India's military concerns
India, has also changed its policy towards Burma.
Initially, Delhi insisted it supported the opposition leader Aung San Suu Kyi and joined the international community in putting pressure on the generals to respect the 1990 election results. However this has changed into one of growing engagement. In the past two years there have been regular ministerial exchanges and a growing military co-operation between the two countries.
India's primary concern is to counter China's dominant influence
Former Indian ambassador
A former Indian ambassador to Rangoon, who did not want to be identified, said: "India's primary concern is to counter China's dominant influence in the country."
"The Indian Government is understandably worried about China's growing military presence in the country," he said.
China 'supports reform'
Although China has remained a staunch ally since 1988, Chinese officials have hinted that Beijing is now growing concerned about the country's long-term stability.
"China's leaders are worried about the military government's lack of political legitimacy and its failing economy," said a Chinese official, on condition of anonymity.
Beijing now fully supports the UN's efforts to help bring democratic reform to Burma, according to officials involved in the dialogue process between the country's generals and Aung San Suu Kyi.
Burma's South East Asian neighbours have also been privately urging Rangoon to accommodate the opposition leader and introduce a measure of democratic reform.
Malaysia's Prime Minister Dr Mahathir Mohammad has been at the forefront of the regional organisation Asean's attempts to get Rangoon to change.
For its part, Rangoon has also begun to engage the international community through the UN system.
Over the past two years they have allowed numerous investigative missions by the International Labour Organisation and the UN rapporteur Paulo Pinheiro - whereas his predecessor was denied access to Burma during the five years of his tenure.
Human-rights groups say forced labour is still used in Burma
"Rangoon has also begun to more responsive to critical reports in the various UN bodies," said a western diplomat based in Rangoon.
Once these reports would have made the generals even more insular than they naturally are. Now they are prepared to listen to criticism and not dismiss them out of hand.
The international community has always seen its hard stand on isolating Burma as part of its attempts to encourage the junta to respect the 1990 election results and improve the human-rights situation in the country.
Now with the release from house arrest of Aung San Suu Kyi, and signs that she will continue to hold secret talks with the generals, there is likely to be pressure on Europe and the United States to reconsider their policy of isolating Rangoon.
Before the opposition leader's release, Washington and the EU both signalled their willingness to reduce Burma's international isolation, and even resume limited humanitarian aid, if the dialogue process yielded concrete results.