In the 1860s, Cuba had two more liberal-minded governors, Serrano and Dulce, who encouraged the creation of a Reformist Party, despite the fact that political parties were forbidden. But they were followed by a reactionary governor, Francisco Lersundi, who suppressed all liberties granted by the previous governors and maintained a pro-slavery regime. On 10 October 1868, the landowner Carlos Manuel de Cspedes declared Cuban independence and freedom for his slaves. This began the Ten Years' War, which lasted from 1868 to 1878, and eventually contributed to the abolition of slavery in 1886.
However, the United States, rather than Latin America, was the frame of reference for educated Cubans. Cubans travelled to the United States, read American newspapers, listened to American radio, watched American television, and were attracted to American culture. Middle-class Cubans grew frustrated at the economic gap between Cuba and the US. The middle class became increasingly dissatisfied with the administration, while labour unions supported Batista until the very end.
Large income disparities arose due to the extensive privileges enjoyed by Cuba's unionized workers. Cuban labour unions had established limitations on mechanization and even banned dismissals in some factories. The labour unions' privileges were obtained in large measure "at the cost of the unemployed and the peasants".
Cuba's labour regulations ultimately caused economic stagnation. Hugh Thomas asserts that "militant unions succeeded in maintaining the position of unionized workers and, consequently, made it difficult for capital to improve efficiency." Between 1933 and 1958, Cuba increased economic regulation enormously. The regulation led to declining investment. The World Bank also complained that the Batista administration raised the tax burden without assessing its impact. Unemployment was high; many university graduates could not find jobs. After its earlier meteoric rise, the Cuban gross domestic product grew at only 1% annually on average between 1950 and 1958.
As early as September 1959, Valdim Kotchergin, a KGB agent, was seen in Cuba. Jorge Luis Vasquez, a Cuban who was imprisoned in East Germany, states that the East German Stasi trained the personnel of the Cuban Interior Ministry (MINIT). The relationship between the KGB and the Cuban Intelligence Directorate (DI) was complex and marked by both times of close cooperation and times of extreme competition. The Soviet Union saw the new revolutionary government in Cuba as an excellent proxy agent in areas of the world where Soviet involvement was not popular on a local level. Nikolai Leonov, the KGB chief in Mexico City, was one of the first Soviet officials to recognize Fidel Castro's potential as a revolutionary, and urged the Soviet Union to strengthen ties with the new Cuban leader. The USSR saw Cuba as having far more appeal with new revolutionary movements, western intellectuals, and members of the New Left, given Cuba's perceived David and Goliath struggle against U.S. "imperialism". In 1963, shortly after the Cuban missile crisis, 1,500 DI agents, including Che Guevara, were invited to the USSR for intensive training in intelligence operations.