The single most important event in Kuwait’s contemporary politics and history is the Iraqi encroachment of the early 1960s. As Kuwait was celebrating its political independence, which took effect June 19, 1961, and building its foundation as a sovereign state, a dramatic challenge to the new state was in the making. An Iraqi Foreign Ministry statement justified the Iraqi case this way: Foreign powers, including the British government itself, recognized the sovereignty of the Ottoman State over Kuwait. Kuwait began to realize the value of money politics. It became clear that Arab support to the besieged regime warranted a serious redistribution of Kuwait’s oil wealth. Therefore, the era of Kuwait’s dinar diplomacy began with the Kuwaiti-Iraqi crisis of 1961. Irrespective of one’s own perception of the Kuwaiti-Iraqi crisis of 1961, Qasim’s politics and personality left their imprint on future relations between the two countries, and brought to the surface the hidden Iraqi resentment and hostility toward Iraq’s southern neighbor.