After decades of repression, reform has come to Burma. But much remains to be done. This week the United Nations Human Rights Council (UNHRC) will debate Burma’s progress, and particularly whether to drop its designation of Burma, or Myanmar, as a “country of concern.”

For years Burma competed for the world title of worst government. North Korea usually took home the crown, but Burma’s leaders in the capital city of Naypyidaw never gave up trying. The long-lived military junta waged war on the Burmese people, suppressed democratic freedoms, and locked the nation into grinding poverty.

But now change is underway. The military has formally stepped back, though the institution retains enormous influence if not effective control of the government. Political prisoners, including Aung San Suu Kyi, have been freed. Controls over opposition parties and independent journalists have been relaxed. Peace agreements have been reached with many ethnic groups seeking autonomy. The government also has begun distancing Burma from China, the country’s assertive northern neighbor.

Western nations have responded by lifting sanctions and offering assistance. President Barack Obama visited the country last November.

Nevertheless, the reform glass, while half full, also is half empty. Conflict continues with the ethnic Kachin, and the Muslim Rohingya continue to suffer from sometimes violent discrimination. Political prisoners remain and no one knows if the military is prepared to yield power when national elections are held in two years.

In preparation for the UNHRC debate, Tomas Ojea Quintana, the United Nations Special Rapporteur on human rights in Burma, issued his latest report, which finds much progress, along with the need for additional reforms before Burma will have fully escaped a half-century of military dictatorship.

Ojea Quintana observed that “The reforms in Myanmar are continuing apace, which is a good sign for the improvement of the human rights situation in Myanmar.” He pointed to the release of additional political prisoners as well as attempts by the government to stem torture and create “a more open environment … for people to express themselves, including a freer media environment.” He also cited “Progress in realizing the right of people in Myanmar to assemble and demonstrate.” Parliament’s role was developing, along with “efforts to develop the capacity of judges and lawyers in international human rights law.”

However, much remains to be done, which is not surprising for a country ruled by a dictatorship reaching back to 1962. Ojea Quintana highlighted “the escalation of military offensives, which has brought further death, injury and destruction to the civilian population” in Kachin State. He worried that “The ongoing large military presence, which remains behind the reach of accountability mechanisms, means that serious human-rights violations are continuing there.”

Moreover, “Rakhine State is going through a profound crisis that threatens to spread to other parts of the country and has the potential to undermine the entire reform process in Myanmar.” Tens of thousands have been displaced and are in camps, while “feelings of fear, distrust, hatred and anger remain high between communities.”

Despite the release of many prisoners of conscience, Ojea Quintana reported that “there still remains a significant number,” perhaps 250, locked away. Torture and deadly beatings continue to occur in “places of detention” such as Buttidaung prison in Rakhine State, in which Muslim prisoners are targeted for abuse.

Ojea Quintana also cited “important gaps” in press freedom, including “the lack of access to information for journalists” and threats to revoke licenses “used by state authorities as a tool for censorship.” Broadcast media reforms lag. Laws regarding freedom of assembly still fail to meet international standards and “implementation on the ground” undermines “reform at the top.” For instance, “Permits for assembles are being granted and denied arbitrarily and on political grounds,” and security personnel sometimes use excessive force.

The judiciary has yet to develop “any independence from the executive branch of government.” He also pointed to the constitutional guarantee of 25 percent of parliament’s seats for the military, which “demonstrates a gap in the democratic functioning of the parliament.” The latter also exhibits the need for constitutional reform.

New investment is flowing into Burma and new businesses are being created. However, even here there are dangers. Ojea Quintana warned of the potential for “land confiscations, forced evictions, environmental degradation as well as reinforcing corrupt power structures and further concentrating wealth and resources in the hands of a few.” The country needs an open, competitive market economy, not a kleptocracy.

Ojea Quintana closed his report by acknowledging that substantial progress had been made. However, he emphasized the gaps “between the reforms at the top, and the reality and implementation on the ground.” This should surprise no one, since a half-century of autocracy is not easy to erase—especially when the autocrats retain ultimate power. But it is vital that the reform process not stagnate.

The Special Rapporteur’s conclusions are supported by the work of independent human rights organizations. For instance, in last year’s annual report Amnesty International cited reforms, but concluded that “human rights violations and violations of international humanitarian law in ethnic minority areas increased.”

Moreover, “Authorities maintain restrictions on freedom of religion and belief, and perpetrators of human rights violations went unpunished.” Although political prisoners had been released, “authorities continued to arrest such people, further violating their rights by subjecting them to ill-treatment and poor prison conditions.”

Amnesty’s 2012 midyear report offered a similarly mixed judgment. Although political prisoners had only received conditional release, “many told Amnesty International that they have been relatively free to resume their political activity without harassment or intimidation.” Legal reform was “underway and has yielded some positive results,” though additional changes were necessary to “eliminate laws whose language is either so broad that its interpretation is subject to political abuse, or is so precise that it unduly restricts the rights of Myanmar citizens.” Of particular concern were army violations of human rights in fighting against the Kachin and Shan peoples as well as “official impunity for serious human rights violations, including past war crimes and crimes against humanity.”

Human Rights Watch provided a similar assessment. According to its 2013 World Report: “Burma’s human rights situation remained poor despite noteworthy actions by the government toward political reform.” Among the problems: “Freed political prisoners face persecution,” peaceful demonstrators “have been charged with offenses,” and “restrictive guidelines for journalists and many other laws historically used to imprison dissidents and repress rights such as freedom of expression remain in place.” Continuing conflict in the Kachin and Shan States as well as “deadly sectarian violence” between Arakanese Buddhists and Rohingya Muslims have led to killings, mass refugee flows, and human-rights violations.

That sounds like a lot of bad news, and it is. Nevertheless, it is important to remember from where Burma has moved. Social transformation is never easy. The gap between a collectivist and militarist authoritarian system and a democratic market order is huge. Especially when the transformation must be managed so as not to alarm the former oppressors who not only still control the military, but are the military.

Ultimately, continued reform will only come from inside Burma. President Thein Sein and those around him are key.

However, the West also can play a positive role. Ojea Quintana said his report was intended to “help highlight the shortcomings and to help the government in implementing its reforms.” Moreover, he hoped “to remind the international community of their important role in prioritizing human rights when engaging in bilateral relations with Myanmar, including in business and investment relations.”

As the UNHRC—which has operated with unusual effectiveness regarding Burma—takes up that nation’s status, UN diplomats have suggested that Naypyidaw’s next step should be to act on last year’s agreement in principle to allow the international body to open a human-rights office in Burma. The Council could vote to provisionally lift the “country of concern” designation a year after the Burmese government allows establishment of a UN human-rights office. That would maintain pressure for reform while rewarding better behavior.

The United States, Europe, and democratic Asian states should adopt a similar approach. The best reward for reform would be to eliminate remaining economic sanctions. Indeed, the Amnesty International delegation reported last year that “the message from many concerned individuals [was] that ‘sanctions did not cause Myanmar’s economic decline, but they are hindering its economic recovery.’” “To the degree that a viable economy is a necessary, if insufficient, part of promoting and protecting economic, social, and cultural rights,” the organization urged governments to critically assess their policies.

Western investment would be particularly helpful in expanding Burma’s middle class and providing necessary resources for democratic political activism. A growing economy also would offer benefits to the vast majority of government and security personnel who did not gain substantially from past elite corruption. In contrast, Washington and allied states should not shower Naypyidaw with foreign aid, which often slows reform and strengthens corrupt forces allied with the state. Burma most needs growth in private businesses and civic institutions.

In a world where much has gone badly, Burma is moving toward greater political and economic liberty. The latest report from the UN’s Tomas Ojea Quintana reminds us both how far that impoverished, war-wracked nation has come as well as how far it has yet to go. Washington should continue to promote the reform process, engaging Naypyidaw with high hopes leavened by realistic expectations.