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Southeast Asian nations endorsed Burma on Thursday for the chairmanship of a key regional grouping, gambling that the isolated country can stick to reforms begun this year that could lead it out of half a century of isolation.

But US President Barack Obama cautioned that Burma, also known as Myanmar, must still demonstrate improvements in human rights in his first remarks since the authoritarian regime freed hundreds of political prisoners in October and vowed more reforms in the weeks ahead.

“Some political prisoners have been released. The government has begun a dialogue. Still, violations of human rights persist,” Obama said in a speech to the Australian parliament ahead of joining Asian leaders in Bali, Indonesia, for an East Asia Summit.

“So we will continue to speak clearly about the steps that must be taken for the government of Burma to have a better relationship with the United States.”

The United States has said that freeing political prisoners is one of several preconditions to lifting sanctions that have isolated Burma and driven it closer to China. Other conditions include peace with restive ethnic groups after years of unrest.

But Southeast Asia has moved quickly to embrace change in the resource-rich former British colony, whose strategic location between rising powers India and China, and vast, untapped natural-gas resources, have rawn investor interest.

The 10-member Association of South East Asian Nations (Asean) -- of which Burma is a member -- formally gave Burma the chairmanship of the Southeast Asian regional bloc in 2014, two years ahead of schedule, said Myanmar government officials at an ASEAN summit on the Indonesian resort island of Bali.

“Be assured that we are now growing into a democratic society and we will do all our responsibilities and duties as a responsible government, reflecting the desires of the Myanmar people,” Ko Ko Hlaing, chief political adviser to the Burma president, told reporters.

“We will do what we have to do as a democratic government and a democratic society,” he said. “As a family, ASEAN nations have welcomed Myanmar to be a responsible chairman.”

U Sit Aye, a senior Burmese presidential legal advisor, said more reforms were in store.

“It is . a continuing process,” he said, adding that ASEAN leaders had formally backed Myanmar’s chairmanship at a closed-door meeting in Bali.

Countries across Southeast Asia welcomed the chairmanship as a critical milestone after years frustration over Burma’s isolation as the region approaches a European Union-style Asian community in 2015.

“We believe that with the positive improvements in Myanmar right now, this has shown that Myanmar would like to come back to the democratic way,” Thai Foreign Minister Surapong Towijakchaiku told reporters on the sidelines of the Asean Summit in Bali.

Recent overtures by Burma’s government have included calls for peace with ethnic minority groups, some tolerance of criticism, the suspension of an unpopular Chinese-funded dam project and the legalization of labor unions.

President Thein Sein has also reached out to democracy leader Aung San Suu Kyi, who was freed last year from 15 years of house arrest. Her National League for Democracy (NLD) is expected to decide on Friday whether to re-register as a political party to contest imminent by-elections.

An official in Suu Kyi’s party said Burma’s expected Asean chairmanship would help to drive more political change.

“Their decision is tantamount to encouraging the present Myanmar government to step up the momentum for reforms,” Nyan Win, a senior NLD official, told Reuters. “Myanmar’s political activities will become more vibrant after assuming the chair.”

Indeed, Indonesia’s foreign minister, Marty Natalegawa, said the chairmanship would likely open Burma further. “I am quite convinced this will have a huge multiplier effect.”

The United States has had strained relations with Burma since the former military junta, which took power in a 1962 coup, killed thousands in a crackdown in 1988. The junta was replaced by a military-dominated civilian government in March after the first elections in two decades last year.

US Secretary of State Hillary Clinton said last Friday that Burma appeared to be making some “real changes” to its political system but needs to pursue more reform.

Burma’s government has responded by urging the United States to lift sanctions, describing its reforms as genuine.

The country, as big as France and Britain combined, is developing ports on the Indian Ocean and Andaman Sea that, if combined with proposed rail and pipeline projects, would allow cargo ships to bypass the Straits of Malacca.

That would open the way for faster delivery of oil from the Middle East and Africa to China and other countries in the region straddling the Mekong River.

India, Japan and Southeast Asia have sought to ramp up engagement, largely to counterbalance China’s influence and to gain a toehold in a country whose proven gas reserves have tripled in the past decade to around 800 billion cubic meters, equivalent to more than a quarter of Australia’s, BP Statistical Review figures show.

Reuters