With jokes and hugs, karaoke and congratulations across Myanmar's often bitter divides, lawmakers yesterday marked the last day of Parliament, as the country eagerly awaits a new Parliament led by the National League for Democracy (NLD).

It was a historic day for Myanmar, which emerged from decades of stifling military rule only five years ago in a calibrated transition that retains wide powers for the military and is beset by scepticism.

Monday's convening of the new Parliament will be even more significant, pulling off a key ingredient of a democracy - peaceful transfer of power following a general election.

The mood among the outgoing lawmakers was jovial and sentimental in the chambers of the Hluttaw - the Houses of Parliament in the sprawling, opulent government quarters of Naypyitaw, the capital built under the now-retired dictator, Senior General Than Shwe.

All politics was swept aside for the day as MPs greeted one another. Upper House speaker Khin Aung Myint drew loud laughter when he opened the last session saying: "I would like to say goodbye to every MP with a funny story about each of them... but time is limited."

Hundreds of NLD members who have been observing Parliament over the past few days were present, and there was much shaking of hands and backslapping.

Later, a farewell lunch and a karaoke session were laid out for the new MPs to mingle with the departing legislators.

There was no sign of bitterness.

A day earlier, President Thein Sein, in his last address to the outgoing Parliament, hailed the country's democratic transition as a "triumph" for the people.

"We have a democratic political culture. More democratic practices have been nurtured among the people, and we have built stronger political institutions,'' he said, while pledging to help the NLD government succeed.

The NLD, which is led by 70-year- old Aung San Suu Kyi, swept last year's Nov 8 general election, with the army-backed Union Solidarity and Development Party (USDP) reduced to a shadow and only the army's 25 per cent block of seats assigned by the military-era Constitution intact.

Mr Thein Sein will remain in office until the end of March but meanwhile, the NLD will control Parliament, which will elect a new president.

Who that person will be remains the subject of intense speculation.

Ms Suu Kyi is ruled out because of a clause in the Constitution that bars her from the post.

While it is technically possible that a vote in Parliament could amend that clause, the scenario is seen as unlikely, unless a breakthrough grand pact is crafted behind the scenes. The NLD, which now dominates both Houses of the 664-seat Parliament, has had two months to get to grips with the business of debates and lawmaking, before forming a Cabinet and taking over the day-to- day administration of the government.

This week, it announced its choices for speakers and deputies.

They ranged from ethnic Burman - the majority - to Kachin, Karen, Rakhine and even a USDP member.

The choices were clearly and deliberately inclusive.

Mr Romain Caillaud, a senior director at FTI Consulting in Singapore, said in an e-mail: "The NLD needs to transition from an opposition party geared towards winning power through popular support and elections, to a government party that understands trade-offs and makes tough decisions."

He added: "Foreign investors are… hoping for even further improvement to the business climate in Myanmar. The country has progressed over the last five years, yet it still has a long way to go."

The list of challenges is long.

They include the need to balance powerful forces in a more politically plural and often volatile Myanmar, forge peace and political agreement with armed ethnic groups, and address serious deficits in infrastructure, education and healthcare.

Yangon-based independent consultant Richard Horsey, a former top United Nations official in the country, told The Straits Times in a phone interview: "On Monday, the symbolism will be strong.

"It is when it all becomes real.''

He added: "But there is a sense among the elites and even in the old guard that Ms Suu Kyi has to succeed, and that if she fails, the country fails."