SCENARIOS - Myanmar's uncertain political future

Members of the Union Solidarity and Development Party (USDP) hand out flyers during a campaign rally near a market outside of Yangon October 30, 2010.

BANGKOK (Reuters) - Military-ruled Myanmar will hold its first election in two decades on Nov. 7, polls that critics say will be a sham resulting in no substantial transfer of sovereign power.

The resource-rich country of about 50 million people is heading for a period of uncertainty, with concern about economic, social and political instability if the new system fails to satisfy the public or the power-hungry generals.

Following are possible post-election scenarios:

COSMETIC CHANGE ONLY, MILITARY RETAINS POWER

Few believe the military will genuinely cede power. The new constitution guarantees the army 25 percent of legislative seats; junta proxies including recently retired generals are almost certain to win plenty more.

The president must include three serving generals as ministers of the interior, defence and border affairs, and other portfolios are expected to be held by military proxies, meaning the armed forces will still control policy and budget decisions. Bills will sail through parliament: the military will essentially control that also.

This is the most likely scenario. Analysts say the junta sincerely believes the military is the only institution capable of running the country. And the generals will want to protect and promote their own business interests also.

"DEMOCRACY" FAILS, MILITARY TAKES BACK POWER

The last time elections were held in 1990; the result was unfavourable for the generals and they refused to hand over power. It appears the junta has learned from that and has carefully drafted a constitution and election laws to ensure it will, in effect, transfer power to itself.

Widespread public rejection of Myanmar's new "democratic" system could trigger an uprising or, less likely, a coup d'etat by a military faction pledging to purge the ruling generals and turn Myanmar into a real democracy.

The military-drafted constitution has a detailed section on declaring a state of emergency, which allows the armed forces chief to assume sovereign power in the face of threats to internal security or national unity. If the military's power is under threat or its influence wanes, it could provoke a crisis of its own making as a pretext to wrestle back control.

GRADUAL TRANSFER TO REAL CIVILIAN RULE

In the long term, Myanmar could undergo a gradual transition of power to a genuine civilian government free of military control or interference. This would be an evolutionary process and might not be the military's intention.

Future elections, constitutional amendments and shifts in the power structure or patronage systems could lead to the emergence of splinter groups or factions within the military. Some may favour offering roles to experienced, educated technocrats deemed capable of handling the economy or health ministry, for example.

International pressure, a desire to reform or just personal business or political interests could see factions of the army or its proxies developing independent agendas of their own.

This scenario is unlikely in the first few governments but could start to unfold when the ageing junta top brass die or fade from the scene. However, any fissures in the military would heighten the chance of coups and political upheaval.

PUBLIC REJECTS MILITARY-CONTROLLED GOVERNMENT

Decades of economic mismanagement, human rights abuses and a failure to invest sufficiently in education, health and public services have created deep public resentment of the military that could boil over, especially if the government fails to deliver the reforms and welfare provisions the constitution promises.

It has happened before. Nationwide monk-led protests in 2007 triggered by increases in fuel and cooking gas prices stoked public anger against the military, which has repeatedly shown its paranoia -- and brutality -- when faced with public revolt.

Myanmar's new democracy could be plagued by cronyism, corruption and wide inequalities. If the judicial system is tainted, farmers are neglected and the government fails to provide adequate welfare, it could have a rebellion on its hands. There are plenty of pro-democracy groups in Myanmar with scores to settle that would be willing lead the charge.

(Editing by Andrew Marshall)