The Dollar: Financial Constraint Through Force - A Synthesis

From Panama and Iraq to Venezuela and Russia, recent history shows that states that have attempted to exit the dollar-based financial architecture have quickly encountered either war or the threat of military force combined with sanctions, which has drastically-sometimes permanently-reduced their room for economic maneuver.

• 1. Panama (1989) - control of financial infrastructure

What it attempted:

Assertion of political independence and firmer control over the Panama Canal, a key infrastructure for global trade.

What followed:

U.S. invasion ("Operation Just Cause”).

Outcome:

The canal and the logistical-financial system remain integrated into the Western order.

Mechanism:

Control of commercial infrastructure translates into indirect financial control.

• 2. Iraq (2000-2003) - oil in euros, war in dollars

What it attempted:

In 2000, Saddam Hussein's regime demanded that Iraqi oil under the "Oil for Food” program be sold in euros, not dollars.

What followed:

The U.S. invasion in 2003 completely removed the regime.

What happened afterward:

Oil exports immediately returned to dollar invoicing.

Mechanism:

Energy removed from the dollar circuit is treated as a security issue.

• 3. Libya (2009-2011) - gold dinar, collapsed state

What it attempted:

Muammar Gaddafi promoted the idea of an African dinar backed by gold for oil and resource trade.

What followed:

NATO military intervention (2011).

Outcome:

The Libyan state was institutionally destroyed, and any alternative monetary project disappeared.

Mechanism:

The intention to build a monetary alternative was sufficient for the elimination of the actor.

• 4. Venezuela (2017-2026) - forced dedollarization, total isolation

What it attempted:

Selling oil in other currencies; closer ties with China and Russia; alternative payment systems.

What followed:

Total financial sanctions, freezing of external assets, and direct military aggression, with the capture of Nicolas Maduro.

Outcome:

The economy was removed from the global financial system.

Mechanism:

The cost of exiting the dollar becomes existential, with a demonstrative role for other actors.