At the end of August the US embassy will move to its new premises in Yangon, a massive building on the edge of Inya Lake that just happens to be walking distance from the compound of opposition leader Aung San Suu Kyi.

Permission to shift to its new site came one day before Myanmar’s military rulers officially announced plans to move the capital to Pyinmana, a remote area 350 kilometres north of Yangon that now goes by the name of Naypyitaw, or Royal Capital.

Despite the announcement, the US has gone ahead with its over 65 million dollar investment.

Diplomatic sources in Yangon – there are no diplomatic sources in Naypyitaw as of yet – said the main reason for the US move was security. The old embassy site on Merchant Street, a veritable fortress now with barbed wire fences and cement-filled oil drums around it, was deemed one of the US’s least secure missions in Asia.

It has been a target of frequent pro-government demonstrations, the most recent of which occurred in January when a rather docile junta-supported mob briefly stood outside the embassy to register their “outrage” over a US-led motion to put Myanmar on the United Nations’ Security Council agenda.

The US has been among the most vocal critics of Myanmar’s ruling junta and one of the staunches supporters of Suu Kyi and her National League for Democracy (NLD) that won the 1990 general election but has been blocked from power since.

Not everyone, even among opponents of the military, appreciates the US’s hard-line stance which has been set in stone, literally, with their decision to build a massive new embassy in a city which is no longer Myanmar’s capital.

“I would just say they were pretty wrong in reading the future of this country; they thought the Naypyitaw project wouldn’t come true,” said Win Naing, who labels himself an “independent politician.”

The man behind a protest march in Yangon last month against rising inflation, Win Naing is trying to carve out a position for himself as a neutral force between the junta and the NLD, who have been deadlocked in their opposition for the past 17 years.

Win Naing faults the US for failing to support other democratic forces that are emerging in Myanmar in the shadow of Suu Kyi, the only opposition leader who enjoys international recognition.

“By recognizing the NLD and the NLD alone and refusing to recognize any other democratic forces, the US is making the NLD arrogant,” said Win Naing.

While Suu Kyi remains a powerful symbol for Myanmar’s pro-democracy struggle, her party has suffered from its virtual isolation from their charismatic leader since her arrest in May 2003. She has been placed under house arrest in her family compound, around the corner from the new US embassy.

Other groups, such as the 1988 Students and Win Naing, have shown much more initiative in staging passive protests against the regime over the past two years while the NLD has disappeared from the scene, perhaps biding its time until an anticipated election in the far distant future.

And while the US has remained rigid in its support for the NLD, other countries have adopted a more exploratory approach to the ruling junta, headed by Senior General Than Shwe, whose brainstorm it was to move the capital to Naypyitaw.

“We have followed the same policy towards Myanmar for the past 16 years,” said one European diplomat. “We have to realize that while our intentions were good, we have not achieved them.”

One sign of the times is that next week the 3D project, a 100-million-dollar programme to help Myanmar combat malaria, tuberculosis and HIV/AIDS, will officially kick off next week, replacing the similarly-motivated Global Fund that ended in 2006 largely due to US political opposition to it.

The 3D programme is backed primarily by the European Union, with strong bilateral support from the governments of Australia and Great Britain.

Ironically, such initiatives on the humanitarian and diplomatic fronts, have now been impeded by the junta’s decision to shift the capital to Naypyitaw.

“When everyone was in Yangon it was already difficult making contact, now the procedural obstacles have increased,” said one western diplomat. “You can’t carry out projects like this.”

The sudden move was even more of a slap in the face for Myanmar’s fellow members of the Association of South-East Asian Nations (ASEAN), which received no prior warning.

Singapore, for instance, was reportedly “furious” with the move since it had already started construction on a new embassy compound in Yangon.

To date, the Myanmar government has yet to officially invite any embassies to shift to the new capital, although it has designated a plot of “scrub land” for future missions, where the diplomats will also be forced to live.

Plots will be made available at the end of this year, diplomats said.

Meanwhile, hopes remain still high in some quarters that the diplomatic migration may prove unnecessary.

“I remain convinced that if something happens to Than Shwe, like if he drops dead, the capital will be moved back to Yangon in a second,” said one western diplomat. “Because no one, including the civil servants and military, like living up there.”