established the Saudi-Kuwaiti neutral zone, an area of about 5,180 km� adjoining Kuwait's southern border.
On 19 June 1961, Kuwait became fully independent following an exchange of notes between the United Kingdom and the then Emir of Kuwait, Abdullah III Al-Salim Al-Sabah. The Gulf rupee, issued by the Reserve Bank of India, was replaced by the Kuwaiti dinar. The discovery of large oil fields, especially the Burgan field, triggered a large influx of foreign investments into Kuwait. The massive growth of the petroleum industry transformed Kuwait from a poor pearl farming community into one of the richest countries in the Arabian Peninsula and by 1952, the country became the largest exporter of oil in the Persian Gulf region. This massive growth attracted many foreign workers, especially from Egypt and India.
Kuwait settled its boundary disputes with Saudi Arabia and agreed on sharing equally the neutral zone's petroleum reserves, onshore and offshore. After a brief stand-off over boundary issues, Iraq formally recognized Kuwait's independence and its borders in October 1963. During the 1970s, the Kuwaiti government nationalized the Kuwait Oil Company, ending its partnership with Gulf Oil and British Petroleum.
In 1982, Kuwait experienced a major economic crisis after the Souk Al-Manakh stock market crash and decrease in oil price. However, the crisis was short-lived as Kuwait's oil production increased steadily to fill the gap caused by decrease in Iraq's and Iran's oil production levels following the events of the Iran�Iraq War. In 1983, a series of six bomb explosions took place in Kuwait killing five people. The attack was carried out by Shiite Dawa Party to retaliate Kuwait's financial support to Iraq during its war with Iran.
Kuwait had heavily funded Iraq's eight year-long war with Iran. After the war ended, Kuwait declined an Iraqi request to forgive its US$65 billion debt. An economic warfare between the two countries followed
