The United States has eased some sanctions on Myanmar as incentive to support the newly elected civilian government to reform towards democracy and facilitate economic development.

“We did this to demonstrate support for the new government’s democratic reforms and to promote broad-based, inclusive economic development”, said US State Department spokesperson John Kirby.

The steps announced by the Department of the Treasury were intended to support trade, facilitate the movement of goods, allow certain incidental transactions related to certain individuals residing in Myanmar, and to allow more transactions involving designated financial institutions in the country, he said.

The measures to ease sanctions would affect trade and financial transactions, which have been restricted between the two countries for a long time since the military rule in 1988.

The easing of sanctions this week was a major move by Washington to support the first civilian government in half a century led by President Htin Kyaw and Nobel Laureate Aung San Suu Kyi.

Secretary of State John Kerry will visit Myanmar on May 22 to meet with leaders in Nay Pyi Taw to signal US support for the democratically elected, civilian-led government and further democratic and economic reforms, a statement by the State Department said.

Myanmar welcomed the US decision and hoped the easing of economic sanctions would help boost trade and investment between the two countries.

“It is a good move. I hope bilateral trade will get a boost starting from this year, given the recent easing of some sanctions. Obviously, our trade volume will also increase, thanks to the potential increase in bilateral economic activities,” said Maung Aung, an economist and senior adviser to the Commerce Ministry.

The new measures would expand General License 20 (GL 20), allowing the use of key transportation and trade-related infrastructure, to counter the unintended consequences of sanctions that hurt the Myanmar economy and US businesses engaged in the Myanmar market, according to the Treasury Department.

“Expansion of GL 20 signals to foreign and domestic companies, that Myanmar is open for business,” it said.

Specifically, the measure would allow Myanmar’s banks on the blacklist like Specially Designated National (SDN) to engage in financial transactions with US banks as well as connect Myanmar’s financial system with the global economy, the US Treasury Department said.

These banks – Myanmar Foreign Trade Bank, Myanmar Investment and Commercial Bank, and Myanmar Economic Bank – would no longer face any restrictions.

The restrictions earlier prevented the Myanmar banks from any direct transaction with the US and they mostly had to depend on banks in Singapore. Also, most of the US investments do not invest directly in the country and many of them are subsidiaries of US firms based in Thailand. There are also restrictions on the amount of investment – a US firm is not allowed to invest more than $ 500,000 in Myanmar.

“Unless all the economic sanctions are completely lifted, it is out of the question for us to attract massive investment from big US companies,” said Than Lwin, senior consultant of KBZ Bank and former deputy governor of the central bank.

Myanmar’s state-owned enterprises such as those involved in mining, timber and jade would be able to do business with their counterpart from the US.

“The lifting of the sanctions may result in more quality exports from Myanmar, especially gems and jewellery, and garment. Our export market should not rely only on China. So, the US may become our next export target in the future, said Than Lwin of KBZ bank.

In the first quarter of this year, Myanmar-US bilateral trade reached US$124.1 million, with US exports to Myanmar worth $75.8 million. Trade numbers have steadily increased since the sanctions were first formally eased in July 2012, from $65.8 million in 2012 to $361.2 million in 2015. Trade totalled $175.7 million in 2013 and $185.6 million in 2014. Major US firms like General Electric, Western Union, Gap Inc, and Coca-Cola have made business forays into Myanmar.