For many Americans and Cubans, a thawing of the frosty relationship between the two countries will have an economic upside.
With Cuba releasing American Alan Gross after five years in prison there, President Obama is announcing significant changes in U.S.-Cuban relations, which include an easing of some restrictions on issues including travel, sending money to Cubans and using bank cards in the country.
The changes mark the biggest shift in relations between the two countries since 1961. The White House said it wants to encourage "positive changes" in Cuba partly by sparking economic activity between the two countries. The U.S. will also discuss re-establishing diplomatic relations with Cuba, which were cut off more than half a century ago.
The thawing of economic relations raises the prospect that the U.S. embargo of Cuba will come to an end after half a century. The embargo has been viewed by some as a misbegotten policy that failed to incite the Cubans to demand democratic reforms.
Despite the embargo, the U.S. is Cuba's largest supplier of food, while remittances -- or money sent from Cubans and Cuban-Americans to family members in Cuba -- contribute a significant chunk to Cuba's economy. In 2012, about $2.6 billion in cash remittances were sent to Cuba, with almost two-thirds of Cuban homes receiving remittances, according to the Havana Times.
That may be poised to boom, given the U.S.' plans to raise remittance levels to $2,000 per quarter from its current $500 threshold, while donations to humanitarian projects and the support of private businesses won't require a license any longer, the White House said.
Exports will be eased, allowing agricultural equipment, some building materials and goods for private-sector Cuban entrepreneurs to be sent from the U.S. Imports will also be loosened, with licensed U.S. travelers authorized to import $400 worth of Cuban goods, including $100 of liquor and tobacco products.
For travelers and business people, transactions are set to become easier as well, as U.S. institutions will be allowed to open accounts at Cuban financial institutions. Perhaps most importantly for travelers, U.S. credit and debit cards will be allowed for U.S. by visitors.
Obama, who also said he wanted to spur the flow of information to Cuba, announced plans to ease the embargo, while noting that it is "codified in legislation."
So why make these changes now? While the move was tied to Gross' release and billed as a humanitarian effort to help the Cuban people, the fact is that the changes come as one of Cuba's biggest trade partners, Venezuela, is struggling with low prices for crude oil as well as an economic and political crisis.
Cuba receives about 80,000 barrels of Venezuelan oil each day, although deliveries fell by as much as one-third in 2013. With sliding oil prices and unrest, that's raised the risk that Venezuela will shut down subsidies to Cuba, as well as the potential for a default or other credit event.
If oil prices remain at their current levels or continue to fall over the next year, Venezuela may be more likely than not to have a "credit event," such as bankruptcy or credit default, the Eurasia Group said in a Wednesday research note.
As for the U.S., the White House is eyeing an opportunity to spur reform through economic and diplomatic changes.
"We know from hard-learned experience that it is better to encourage and support reform than to impose policies that will render a country a failed state," the White House said in a statement. "With our actions today, we are calling on Cuba to unleash the potential of 11 million Cubans by ending unnecessary restrictions on their political, social, and economic activities."
Not everyone was convinced. Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.) condemned Obama's actions as having "vindicated the brutal behavior of the Cuban government." In a statement, he added, "Let us all remind ourselves that an untold number of ordinary people yearning for democracy remain imprisoned by the exact same tormentors that have punished Alan Gross and they, along with all Cubans, deserve a free and liberated Cuba."