Although the embargo has remained tight, it has been modified through the years to include the export of U.S. food products and medicine to Cuba as well as the import of Cuban art and music to the United States.
The special relationship with the Soviet Union: Cuba signed its first major trade agreement with the former Soviet Union in February 1960. For decades, the Soviet Union was Cuba's staunch ally and buffered its economy. It bought its sugar and nickel at high preferential prices, provided technicians for its industries, forgave trade deficits and sold oil to Cuba at cheap, fixed prices.
Mesa-Lago estimates Soviet net subsidies to Cuba from 1960 to 1990 at $64.5 billion. Now, he said, Venezuelan President Hugo Chávez has taken the Soviet Union's place with an oil subsidy he estimates hit $2.5 billion in 2007. Mesa-Lago said Cuba also is highly compensated for the doctors, nurses and teachers it sends to Venezuela.
The end of the Soviet era in Cuba: In 1989, with political upheavals in Europe, the old Soviet-led trading bloc began to fall apart. That was bad news for Cuba, which depended on the Soviet Union for about 85 percent of its trade.
By 1992, Soviet oil shipments had shrunk from a peak of about 13 million tons annually to four million to six million tons. By that November, Cuba said it had lost some 75 percent of its foreign trade. Rather than a gradual weaning away from the special relationship with the Soviets as Cuba had hoped, the change was abrupt and devastating.
Cuba was oil-starved, its streets dark, its vehicles idled and its people hungry during the early 1990s, known as ``the special period in a time of peace.''
Then a slow process of reform began as Cuba scoured the world for new trading partners and sources of revenue. It opened to foreign investment, put more emphasis on food production, allowed limited self-employment and farmers' markets, legalized the dollar and put out the welcome sign for tourists.
Despite help from Venezuela and Cuban-American remittances, analysts say the quality of life for the average Cuban is still below 1989 levels, and its social welfare model emphasizing education and access to healthcare has eroded in the intervening two decades. The gap between the haves and have-nots that the revolution worked hard to close has widened, said Mesa-Lago.
Cuba under Raúl Castro: ''It's clear that Raúl Castro has made many accurate and clear diagnoses of Cuba's economic problems'' since becoming president and allowed the official Cuban press to make criticisms, said Phil Peters, a Lexington Institute vice president who studies international economic programs. ``But Cuba, in a sense, is between two presidents as we are now. Some of the momentum [for reform] has stopped as Fidel's health has improved.''
So while there's been a lot of discussion, there hasn't been much action except in agriculture, which was hit hard by hurricanes this year. Cuba recently began distributing more land to private farmers and raised the prices the government will pay them for beef, milk, potatoes and other products.
''I think what Cuba is doing in agriculture is showing positive results,'' said Peters, who visited Cuba earlier this month. But, he said, ``It's very clear that to solve its economic problems, Cuba needs policies that will stimulate growth, create more jobs and generate growth in personal income.''