The Government plans to step up development assistance to Burma by creating a $6 million model dairy farm over five years.

And President Thein Sein, who has a special interest in agriculture, is expected to visit New Zealand, possibly before Christmas, Prime Minister John Key said in Yangon.

Today he is on his way to meet President Sein and Opposition leader Aung San Suu Kyi in the capital Naypyitaw, where he will enlarge on the announcements and outline an extension to education assistance.

He will first visit the Taukkyan cemetery near Yangon to pay his respects to the war dead, including nine New Zealanders who lost their lives in Japanese-occupied Burma during World War Two.


Mr Key landed in Burma yesterday after attending the East Asia Summit in Cambodia and said he was "stunned" by Yangon given the country had been under military rule for 50 years.

It was a lot more developed than he had been expecting with new cars and new building going on.

He addressed a small meeting of New Zealand business representative in the Burma marketplace, including Fonterra, Becca and Oceanic Communications.

The city turned on a good day for Mr Key and the parts he saw were clean, green and lush. The streets had markedly fewer advertising hoardings than would normally be seen in a city of four million plus. But Samsung, Digicel and Coca Cola are there. McDonalds, KFC and Starbucks are, however, not yet.

Mr Key said there would be great opportunities over the next 10 to 20 years.

It would be "teeming with economic development if they get it right".

It was rich in oil, gas, minerals, and gemstones and it had hydro capability and very arable land.

"They have got the capacity to feed themselves and there is a huge amount of opportunities."


Mr Key also met a group of ex-pat New Zealanders living in Yangon and some Burmese who study in New Zealand.