NAYPYITAW -- Myanmar ushered in a new era with a historic transition on Wednesday from a military-backed administration to a mainly civilian government led by Htin Kyaw, the "proxy president" handpicked by Aung San Suu Kyi to be the first civilian leader in 54 years.

Clad in traditional longyi sarong and ceremonial gaung baung hat, the low-key former bureaucrat entered the national parliament in Naypyitaw, the capital, shortly before 10am to take his oath of office. Alongside were his two vice presidents, Henry Van Thio, an ethnic Chin lawmaker chosen by Suu Kyi's National League for Democracy, and Myint Swe, a former general nominated by parliament's military appointees.

They were closely followed by Suu Kyi, leader of the NLD, which swept national elections in November. Suu Kyi joined 17 other cabinet appointees to take her oath for what is expected to be minister of multiple portfolios -- in a cabinet she has said she will control.

In the most recent development, party insiders said she is likely to take an overarching "state advisory role" that would function rather like a prime minister. The BBC reported it had seen a confidential draft bill creating the role of "advisor to the state" that could be presented to parliament in coming weeks. As the NLD controls early 80% of contested seats in the legislature, excluding the 25% allocated to the military, support for such a bill is virtually assured.

Htin Kyaw, second from right, about to be sworn in as Myanmar's new president in Naypyitaw on March 30. (Photo by Yumi Kotani)

Htin Kyaw, the son of a famous poet and writer, was described by one diplomat as the "most improbable and unassuming leader" in Myanmar's history. After months of speculation following her party's election triumph, Suu Kyi, who is barred from the presidency by constitutional restrictions, chose her old friend and former schoolmate for the job. At the time, he was helping to run a charitable foundation set up in memory of Suu Kyi's late mother, and was also helping his wife, Su Su Lwin, an NLD lawmaker.

Suu Kyi has said she will be "above the president," but her decision to take four of 21 portfolios -- foreign affairs; energy and electric power; education; and minister of the president's office, according to party insiders -- technically puts her under the president. The new role, of "advisor to the state," is much more broadly defined and would enable her to range fully across all sectors, with authority similar to that of a prime minister. The move according to the BBC, would deflect criticism that Suu Kyi is acting unconstitutionally by taking on so many positions.

In a brief inaugural speech to parliament, however, Htin Kyaw made it clear he would follow the dictates of Suu Kyi, stressing he would conduct himself "with respect" to her victory. In a typically understated tone, he said he would make a priority of constitutional reform and called for patience in the pursuit of full democracy.

He also said he would strive to improve people's livelihoods and achieve peace with armed ethnic armed groups. Conflict between the armed forces and ethnic groups continues in parts of the country despite a partial cease-fire signed in October by eight of 16 groups negotiating with the outgoing administration of President Thein Sein.

"Our new government will implement national reconciliation, peace in the country, emergence of a constitution that will pave the way to a democratic union, and enhance the living standard of the people," Htin Kyaw told the combined houses of parliament at the ceremony.

"We have the duty to work for the emergence of a constitution that is appropriate for our country and also in accordance with democratic standards," he added, in a pointed reference to Suu Kyi's unsuccessful efforts to persuade the armed forces to support a constitutional amendment to enable her to be president.

Under the 2008 constitution, the military -- which ruled the country for more than five decades in a harsh and secretive style -- has an automatic allocation of 25% of seats in national and regional parliaments and retains three crucial cabinet portfolios: defense, interior and border affairs.

Emotional transition

For many people watching or listening to the handover ceremony via radio or TV it was an emotional moment. "We waited 50 years for this," said Thet Thet Khine, an NLD lawmaker and former businesswoman who was elected to parliament for the first time in November. "Having two leaders could be seen as difficult, but I trust Daw Suu has chosen the right person to work with her," she said, using a Myanmar honorific for the NLD leader.

Others noted Htin Kyaw's simple maiden speech mainly for its brevity. "I guess it was fine, but -- well, we'd hoped for something more, maybe just a bit flat," said a young lawyer who was visiting Naypyitaw on business and had delayed a meeting to watch the ceremony.

Thein Sein's legacy

In an official handover after the swearing in, Htin Kyaw and Suu Kyi met the outgoing president at the grandiose presidential palace near parliament. A former general and senior member of Myanmar's ruling junta, Thein Sein launched the country on its extraordinary transition toward democracy -- many say at the behest of the former dictator Than Shwe, who chose him to lead the government from 2011 and then abruptly retired.

In the eyes of some critics, Thein Sein was too close to the interests of the military, but international and domestic observers have praised him for implementing vital reforms and ultimately presiding over a relatively clean election and an orderly handover of power.

National League for Democracy party leader Aung San Suu Kyi (Photo by Yumi Kotani)

Both Htin Kyaw and Suu Kyi, in their awkward configuration as official and unofficial leaders, face many challenges -- particularly from the powerful military.

Despite national jubilation, analysts are already questioning Suu Kyi's judgment and ability to rule. Not least they have criticized her cabinet choices -- particularly given recent controversy over revelations that the finance minister-designate had cited a bogus degree. Her choice of some relatively inexperienced and unknown figures has surprised observers.

In addition, critics have expressed concern at Suu Kyi's decision to take on numerous portfolios and to slash government structures, including the cabinet, which will contract from 36 to 21 seats. Most deputy minister positions have been eliminated in order to "save money."

Underlying these practical considerations are more discreet concerns, including the growing influence on the administration of former parliamentary Speaker Shwe Mann, who had an obvious hand in a number of cabinet and senior parliamentary appointments and the recent selection of some of the nine members of a new constitutional tribunal.

Since entering parliament after an April 2012 by-election, Suu Kyi has formed a close and unlikely friendship with Shwe Mann, who was a leader of the ruling Union Solidarity and Development Party before he was ousted last year, and was a senior member of Than Shwe's junta. He failed in his bid to gain a seat in the last election and has been appointed by the NLD to an influential parliamentary advisory committee on reviewing legislation.

Ultimately, according to the research house Capital Economics, questions remain over how much power the military will be willing to cede to allow the new government room to implement policies. "There are also concerns over the new government's lack of experience," it said in a Wednesday note. "Members of the NLD have spent much of the last 25 years out of government, either in political exile or prison."

The one certainty in Myanmar's new era is that there are many more unknowns ahead. As a senior Western diplomat attending the swearing-in ceremony put it, "It is indeed a historic day with great cause for celebration -- but there are clouds on the horizon and many daunting challenges."