Western governments should scrap sanctions against Myanmar to encourage badly needed investment in the country, Thein Sein , the country’s president, has warned as he vowed to step up the pace of reform.

In one of his first interviews since being elected 18 months ago, Mr Thein Sein said “major” western investment was crucial to his country’s rapid democratisation but would not materialise until sanctions have been revoked. The US and EU, among others, have decided recently to suspend some restrictions on business and economic activities in Myanmar, but not scrap them altogether.

“It’s only if you lift the lid entirely that it allows everything to come out,” Mr Thein Sein told the Financial Times. “It is extremely important that sanctions be lifted – both financial and other economic sanctions – to make possible the sort of trade and investments that this country desperately needs at this time.”

Mr Thein Sein also said opposition leader Aung San Suu Kyi’s participation in the political process was vital to the country’s future. “All these economic sanctions have political reasons behind them,” he said. “It is one of the reasons why it has been so important to engage with [Ms Suu Kyi] and to include her in the process of political reconciliation.”

The US unveiled detailed guidelines for US financial and business transactions , ahead of Thursday’s visit by Hillary Clinton, US secretary of state, to Cambodia for a regional foreign ministers’ meeting. President Barack Obama said US companies would be allowed to invest in Myanmar but stopped short of revoking sanctions entirely.

While hailing Mr Thein Sein’s “significant progress along the path to democracy”, the US president cited continued concerns such as the Myanmar military’s business empire and investment transparency.

A US business delegation will visit Myanmar this weekend following Wednesday’s arrival of Derek Mitchell, the new US ambassador to the country.

US officials have confirmed that sanctions against Myanmar were suspended rather than revoked in order to ensure reforms remain on track. US congressmen have also signalled their intention to maintain pressure on the government, with moves to renew legislation that bans all imports from Myanmar.

Even so, Washington has indicated it wants to reward Mr Thein Sein for his reforms over the past year. These have included the release of an estimated 700 political prisoners, and elections that brought Ms Suu Kyi and her party into parliament.

Speaking in the sprawling presidential palace in Naypyidaw, Mr Thein Sein promised a “second wave” of economic reforms.

He also rejected charges that the military still has a powerful grip on the government. Myint Swe, a former army intelligence chief, was promoted to vice-president on Tuesday.

“This is an armed forces that the country has had to rely on for a very long time for security and to meet external threats as well in the past,” Mr Thein Sein said. “So it was important at this time that they were not left behind entirely.”