Bahrain

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Bahrain is a tiny kingdom on a peninsula on the Arabian peninsula on the Gulf of Arabia or the Persian Gulf, depending on with whom you want to pick a fight.

As such, its people are an average 15 cm (6 in) tall. Therefore, they were always under threat from neighboring tribes, though their ferocity as warriors riding their silver chocobos was universally respected. They largely spent their time building sandcastles and having sand fights until prospecting geologists reached Bahrain. This time in history can be summed up by a traditional song about Salman, then emir of the ruling family:

“And then one day he was shooting at some Jews
When up from the ground came a-bubbling crude.
Oil that is... ”
~ Ballad of Djedd al-Klampet

With oil money pouring in, Bahrain raised its standard of living tremendously for its ruling family, with an airport, harbor, shopping center and roller coaster on every member's estate. When the peasants resented them holding and controlling the country's wealth and demanded a share, protesters were wiped out by the army riding titanium mecha-chocobos with lasers.