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CNN Live Saturday

Interview With Roben Farzad

Aired January 04, 2003 - 18:05   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANDERSON COOPER, CNN ANCHOR: Demonstrations continue in Venezuela this weekend. Supporters of President Hugo Chavez back in the streets today. Two pro-Chavez demonstrators were killed Friday in fighting outside the country's military headquarters.
The protest there could lead to economic problems right here in the U.S. Roben Farzad of "SmartMoney" magazine joins us from Miami to tell us why.

Good evening, thanks for being with us.

ROBEN FARZAD, "SMARTMONEY": Good evening, Anderson.

COOPER: Why should Americans pay attention to what is going on in Venezuela?

FARZAD: Americans typically make the mistake of thinking that whatever happens in terms of the global crude oil market is a function of goings on in the Arab Middle East, but Venezuela is actually the fifth largest oil exporter in the world and a key supplier to the United States. Clearly, we've felt it in the past month as prices at the pump have gone up several pennies.

COOPER: We have seen pictures in Venezuela of long lines at pump. This situation seems to just be getting worse and worse and worse. Those pictures that we've seen, of those long lines, I mean, theoretically if this crisis in Venezuela continues could we see that here in the U.S.?

FARZAD: I don't think -- I think we're a ways from that. You have to keep in mind that the United States is still enjoying rather cheap prices at the pump compared to with the rest of the developed world. If you visit Canada or Europe, you know, people scoff at this notion that Americans complain about a $1.50 a gallon gas, or $1.60.

As we like to say, you still have to pay more for a gallon of Evian that you would a gallon of gas.

But we're a ways away from seeing lines at the pump, certainly, it is not an immediate crisis for us.

COOPER: What is the crisis? I mean, there are a lot of us who have not been following this story very closely in Venezuela. What is the crisis centered on?

FARZAD: The crisis is centered on Hugo Chavez who was elected as a champion of the poor several years ago. He was re-elected a couple -- two years back. And now with unemployment and inflation spiraling in the high 20 percent, a piece, people want him out. It is not a class warfare thing anymore. They notice that the situation is untenable.

The country is now a net importer of oil, which shows you how dire their situation is. They haven't been able to ramp up production, fully take advantage of their oil crown jewel. And there is a sense of unanimity now that this was not the guy to bring in.

COOPER: Well, it is remarkable. They are actually, I believe, importing oil. Last I heard, from Brazil. And this for a country which, I think, is like the fourth or fifth largest oil supplier in the world.

FARZAD: Right. Correct. I mean, these are stop-gap measures. Chavez I think realizes that his number is up and he's pursuing -- you know, making overtures to the Algerians, to the Filipinos, to bring in workers to replace these striking workers. But he has no sympathy among the people of PDVSA, the country state-run oil company.

And they are hitting him where it really hurts. He is losing credibility with OPEC member countries. He's losing credibility in the region. And clearly he is a bigger thorn in the side of the administration here, who wants to pursue a campaign in Iraq.

COOPER: If there is a war in Iraq, how does this situation in Venezuela possibly affect the oil supply to the U.S., especially during the war?

FARZAD: I mean, from a supply shock point of view it is rather dire. You can't imagine us going into Iraq when oil is a $40 a barrel. You don't have any wiggle room in case there are uncertainties that happen there. What if Saddam attacks Israel? What if other countries that don't exactly agree with our standpoint want to hold back supply. That doesn't leave us any margin for error.

So, clearly the administration is monitoring the situation. And it is not exactly something that the administration can do anything about. You recall when he was removed earlier in April for all of 24 hours. I think certain people in the White House were openly gleeful. And when he returned, it is kind of this nanny-nanny boo-boo thing where, don't be so sure that you can kick me out so easily. So you really have to walk on eggshells if you are the White House.

COOPER: I wish you would stop using these terms, these very high-tech, technical terms like nanny-nanny boo-boo. It is very hard to follow, Roben.

FARZAD: I promise I'll stop.

COOPER: All right. Roben Farzad thanks a lot for being with us. Appreciate it.

FARZAD: Thank you, Anderson. Thank you for having me.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired January 4, 2003 - 18:05   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Demonstrations continue in Venezuela this weekend. Supporters of President Hugo Chavez back in the streets today. Two pro-Chavez demonstrators were killed Friday in fighting outside the country's military headquarters.
The protest there could lead to economic problems right here in the U.S. Roben Farzad of "SmartMoney" magazine joins us from Miami to tell us why.

Good evening, thanks for being with us.

ROBEN FARZAD, "SMARTMONEY": Good evening, Anderson.

COOPER: Why should Americans pay attention to what is going on in Venezuela?

FARZAD: Americans typically make the mistake of thinking that whatever happens in terms of the global crude oil market is a function of goings on in the Arab Middle East, but Venezuela is actually the fifth largest oil exporter in the world and a key supplier to the United States. Clearly, we've felt it in the past month as prices at the pump have gone up several pennies.

COOPER: We have seen pictures in Venezuela of long lines at pump. This situation seems to just be getting worse and worse and worse. Those pictures that we've seen, of those long lines, I mean, theoretically if this crisis in Venezuela continues could we see that here in the U.S.?

FARZAD: I don't think -- I think we're a ways from that. You have to keep in mind that the United States is still enjoying rather cheap prices at the pump compared to with the rest of the developed world. If you visit Canada or Europe, you know, people scoff at this notion that Americans complain about a $1.50 a gallon gas, or $1.60.

As we like to say, you still have to pay more for a gallon of Evian that you would a gallon of gas.

But we're a ways away from seeing lines at the pump, certainly, it is not an immediate crisis for us.

COOPER: What is the crisis? I mean, there are a lot of us who have not been following this story very closely in Venezuela. What is the crisis centered on?

FARZAD: The crisis is centered on Hugo Chavez who was elected as a champion of the poor several years ago. He was re-elected a couple -- two years back. And now with unemployment and inflation spiraling in the high 20 percent, a piece, people want him out. It is not a class warfare thing anymore. They notice that the situation is untenable.

The country is now a net importer of oil, which shows you how dire their situation is. They haven't been able to ramp up production, fully take advantage of their oil crown jewel. And there is a sense of unanimity now that this was not the guy to bring in.

COOPER: Well, it is remarkable. They are actually, I believe, importing oil. Last I heard, from Brazil. And this for a country which, I think, is like the fourth or fifth largest oil supplier in the world.

FARZAD: Right. Correct. I mean, these are stop-gap measures. Chavez I think realizes that his number is up and he's pursuing -- you know, making overtures to the Algerians, to the Filipinos, to bring in workers to replace these striking workers. But he has no sympathy among the people of PDVSA, the country state-run oil company.

And they are hitting him where it really hurts. He is losing credibility with OPEC member countries. He's losing credibility in the region. And clearly he is a bigger thorn in the side of the administration here, who wants to pursue a campaign in Iraq.

COOPER: If there is a war in Iraq, how does this situation in Venezuela possibly affect the oil supply to the U.S., especially during the war?

FARZAD: I mean, from a supply shock point of view it is rather dire. You can't imagine us going into Iraq when oil is a $40 a barrel. You don't have any wiggle room in case there are uncertainties that happen there. What if Saddam attacks Israel? What if other countries that don't exactly agree with our standpoint want to hold back supply. That doesn't leave us any margin for error.

So, clearly the administration is monitoring the situation. And it is not exactly something that the administration can do anything about. You recall when he was removed earlier in April for all of 24 hours. I think certain people in the White House were openly gleeful. And when he returned, it is kind of this nanny-nanny boo-boo thing where, don't be so sure that you can kick me out so easily. So you really have to walk on eggshells if you are the White House.

COOPER: I wish you would stop using these terms, these very high-tech, technical terms like nanny-nanny boo-boo. It is very hard to follow, Roben.

FARZAD: I promise I'll stop.

COOPER: All right. Roben Farzad thanks a lot for being with us. Appreciate it.

FARZAD: Thank you, Anderson. Thank you for having me.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com