I've been to Cuba a couple of times, and the poverty is nowhere near the level of abject poverty you would find in a Mexico, Haiti, Brazil and huge portions of Africa.
The have free healthcare, free education and as you can see from their statistics, either from UN or CIA factbook they are in many cases as well or even better off than American in terms of well being (health, longevity, education)
Imagine what they could do if the embargo was lifted. Besides it does not hurt the government it hurts its people.