As the political crisis unfolding in Venezuela seizes the headlines, analysts frequently draw attention to the fact that the South American country has the largest oil reserves in the world. The example of Venezuela, as well as several other African and Middle Eastern states, confirms that natural resource wealth is no guarantee of high living standards. In fact, in many cases, it seems as though an abundance of oil and diamonds may have been a leading cause of poverty and instability, rather than a source of prosperity.
The importance of productive agriculture is a key reason why human civilization started in fertile lands such as Mesopotamia and Egypt, and why it went on to flourish in the temperate regions of Europe. It also explains why one can scarcely think of prosperous desert nation at any point in history.
Monarchs, on the other hand, are typically more long-sighted, and that is a key reason why the Gulf countries have historically exhibited extreme respect for property rights, enabling them to attract large volumes of foreign capital.