In a span of weeks, Washington has kidnapped a head of state in Caracas, was handed a second peace medal and seems deadly serious about taking over Greenland. It’s tempting to treat this as a farce. It is not. It is a severe blow to the rules-based global order.

Russia tore a hole in that bargain when it invaded Ukraine in February 2022, widely understood as a textbook violation of territorial integrity. But the United States was seen, at least by its allies, as the guardian of that order. If Washington now signals that sovereignty in Venezuela and Greenland is negotiable, allies and partners will ask the only rational question: Is ours negotiable, too?

The rules-based order rests on one core idea: sovereignty. After World War II, countries explicitly put state sovereignty and territorial integrity at the heart of the post-war bargain to protect weaker states from stronger ones and to avoid the convulsions and bloodshed of the world wars. The memory of those horrors has faded, and the lessons memory-holed. The new message from Washington is simpler and cruder: sovereignty is not a principle. It has a price and is negotiable.

The US operation in Venezuela creates cognitive dissonance. Even if Nicolás Maduro was an authoritarian who, along with Hugo Chávez, presided over the collapse of the Venezuelan economy, abducting a sitting head of state is not a marginal adjustment in foreign policy. It is a declaration that rules are optional and that power comes first, while legal arguments are assembled later.

The resource curse

To see the tragedy of Venezuela, let me start with a bet. For years, I directed a programme for Singapore’s Economic Development Board, and I would begin with a quiz: “In 1975, which of the two countries (see data below) would you bet on?”

The answer is clear – almost all would bet on Country A instead of Country B. Country B has no natural resources, comes with high population density, is far from major trading centres (access to trade and supply chains matters) and scores low on democracy.

Of course, that bet would be catastrophically wrong. Country A is Venezuela, Country B is Singapore. 

Many attribute the collapse of the Venezuelan economy in mid 2010s to a single cause. For instance, Venezuelan economist Francisco Rodríguez argues that the US’ scorched-earth sanctions in 2017 during the first Donald Trump administration, triggered by an “uncompromising opposition”, decimated the oil industry but failed to initiate regime change. However, under Chávez and subsequently under Maduro, bad policies abounded and predated the 2017 sanctions. 

Most consequential was the mismanagement of the state oil company, Petróleos de Venezuela (PDVSA), which Chávez saw as a cash cow. Investments in PDVSA collapsed, its budget was raided to fund social programmes and extract rents, and technocrats and engineers were fired. Pro-cyclical spending, double-digit fiscal deficits due to fuel and electricity subsidies – which were financed by loading obligations onto PDVSA – and monetary financing of deficits eventually triggered hyperinflation and a currency collapse. 

When oil prices started declining in 2014, the government responded with widespread expropriations, capital controls and broad price and profit controls that crushed investment and domestic production. It fell victim to the Dutch Disease and lacked the institutions to benefit from its natural resources. Venezuela’s oil turned out to be a curse.

The Trump administration has trotted out a series of excuses for its kinetic intervention. But essentially, oil is the common theme here. It’s the reason investors would have bet on Venezuela in 1975, its mismanagement led to Venezuela’s economic collapse, and it’s the clearly stated rationale by Trump for removing Maduro.

So, why is the US burning its diplomatic capital and the concept of sovereignty for a failed state? 

Fate lies in the oil

Venezuela has the world’s largest proven oil reserves: roughly 17 percent of the global total, according to its own estimates. This thick, black sludge (extra heavy and sour) is expensive to produce, an environmental nightmare, and requires massive investments over a decade. Venezuela’s oil production is currently below 1 million barrels a day, a fraction of its peak of about 3.4 million in 1998. Restoring the country’s oil industry to its peak requires massive investment, estimated at US$10-20 billion a year for a decade. Venezuela is uninvestable, according to ExxonMobil’s CEO, who showed little enthusiasm in a recent meeting with Trump.

But not all oil is the same. US shale oil is “light and sweet” and used to make gasoline to move humans, as well as naphtha to move heavy, sludgy oil in pipelines. Venezuela’s oil, specifically from the Orinoco Belt, is “extra heavy” and “sour”, best suited for asphalt used in construction, which makes up about 20 percent of total oil demand in the modern economy.[MOU1] 

Therefore, while Venezuela is responsible for less than 1 percent of the world’s overall oil output, it is incredibly valuable for asphalt used in infrastructure. Moreover, it’s not just about where the oil sits and who you can sell it to, which is impacted by geopolitics (e.g. China-Venezuela, India-Russia) and sanctions. One key issue is refining capacity: US Gulf Coast refineries are specifically engineered with coking and hydrocracking units to convert Venezuelan sludge into diesel. 

In sum, the Venezuelan operation was about oil, as Trump has repeatedly stated, and we should take him both seriously and literally. As long as Venezuela’s acting president Delcy Rodríguez makes a deal with Trump on oil and allows American oil companies to re-enter the country, the US will show scant interest in the plight of ordinary Venezuelans or in restoring democracy.

In this light, opposition leader María Corina Machado’s attempt to secure Trump's commitment to Venezuelan democracy by handing over her Nobel Peace Prize is tragic. Trump does not do solidarity. He does cards. Tragically, the opposition in Venezuela may fracture between those tempted to work with the US and elements of the post-Maduro regime and those who recoil at such a partnership. 

The Donroe Doctrine

The original Monroe Doctrine was delivered almost in passing, a few sentences in President James Monroe’s 1823 State of the Union. Its claim was blunt: foreign powers should keep out of the Western Hemisphere, and any new interference would invite an American response. The US feared that continental European powers, specifically Russia, Prussia, Austria and France, would intervene in Latin America to restore these colonies to Spanish rule. The core bargain was “Two Spheres”: the US would not interfere in European affairs, and Europe would not interfere in the Americas.

The “Donroe Doctrine” is imperialism on the cheap. A big contradiction lies at its heart: the administration claims it will dominate a sphere of influence from Greenland to Argentina, but it rejects the burdens that historically came with such claims: boots on the ground, governance and the unglamorous grind of rebuilding states. Instead, Trump’s doctrine is about spectacle and submission. It favours short, cinematic, attention-grabbing operations, a quick declaration of victory, and then attempts to coerce the remnants into submission.

The deeper signal is that great powers are increasingly comfortable acting first and litigating norms later. This is not a formal license for everyone to carve the world into exclusive zones, but it lowers the political and legal price of trying. The system tilts away from rules and toward fiefdoms: the US asserts primacy in the Western Hemisphere, Russia pushes harder in Europe, and China expects deference in East Asia. Even middle powers will be tempted to impose their own regional hierarchies.

In this world, everyone will draw the lesson: hard power, plus economic leverage, is the currency that matters. 

Strategies for survival

Allies and partners of the US should start asking: if sovereignty is negotiable in one region, could it be in another?

Countries like Singapore and Vietnam have long relied on a “balanced” model: economic ties with China, security ties with the US. But if the US is unpredictable or transactional, that insurance policy starts to look worthless. Why align with a distant power that might not show up, or where a “random tweet” can flip its entire foreign policy? Even NATO is starting to resemble a protection racket.

So, what can countries do?

First, get cracking. While there is no quick fix, nations should no longer see Trump or MAGA (Make America Great Again) as a temporary anomaly. The world cannot be organised around the preferences of 40,000 voters in Wisconsin every four years.

Second, invest in hard power: technology, defence, trade and manufacturing. That is the only currency that matters. Singapore’s strategy is to make itself indispensable, or at least too costly to swallow – what Lee Kuan Yew described as the poisonous shrimp approach.

Third, make new friends quickly and establish stronger economic connections, especially with neighbours facing similar constraints and with middle powers like India, Brazil and Turkey.

Fourth, prepare populations for pain and sacrifice. Leaders have to translate what this evolving order means in daily terms and build urgency, not just awareness. In practical terms, that means stronger fiscal positions, higher taxes, and budget shifts to shore up economic and military vulnerabilities. It can also mean compulsory national service and other visible commitments that signal resolve.

Finally, do not despair. Keep history in mind. With the notable exception of the US in the 20th century, regional hegemons – from Imperial Japan to Napoleonic Europe to the Soviet sphere – have tended to overreach. Eventually, the costs of coercing the periphery exceed the economic value extracted. Hubris rises. Resistance adapts. Coercion becomes expensive. And the hegemon discovers that dominance is not the same thing as control.