BANGKOK – Myanmar has the potential to quickly boost economic growth if the government modernizes the financial sector and makes it easier for companies to trade and invest, the International Monetary Fund says.

”The new government is facing a historic opportunity to jump start the development process and lift living standards,” Meral Karasulu, who led an IMF mission to Myanmar that ended Wednesday, said in a statement.

”Myanmar has a high growth potential and could become the next economic frontier in Asia” if it takes advantage of rich natural resources, a young labor force and its proximity to China and India, she said.

The IMF is pushing for an overhaul of Myanmar’s finances as President Thein Sein releases political dissidents, lifts media restrictions and engages with opposition leader Aung San Suu Kyi.

The moves have prompted the United States and Europe to reassess sanctions against the former military dictatorship that have been in place for more than two decades.

Myanmar’s government is confident that April 1 by-elections will be ”free and fair” as demanded by Western countries that have imposed sanctions on the Southeast Asian country, Foreign Minister Wunna Maung Lwin said Wednesday in New Delhi during a four-day visit.

Suu Kyi’s party will contest the special vote for 48 seats in the 664-seat parliament, the first time it is participating in an election since winning 1990 polls that were ignored by the military.

The EU this week ended travel restrictions on Myanmar’s senior leaders and pledged to consider lifting other sanctions in April, a view shared by U.S. policymakers.

U.S. sanctions ban imports, restrict money transfers, curb aid money, freeze assets and target jewelry with gemstones originating in Myanmar. The EU has lighter restrictions, including a ban on weapons sales and imports of minerals.