Facade of Wealth Fades in Venezuela : Latin America: Middle class had gotten used to luxuries. But plunging oil prices broke the bank.

The Ordaz family once lived the middle-class dream, Venezuela style. There was a condo in Miami, beach weekends in Barbados, private schools, four-wheel-drive vehicles. But the sweet taste has turned sour.

“It does seem like a dream now,” said Nestor Ordaz, a 45-year-old electronics store owner. “But it’s all over. I’m not sure what happened, but it’s all over.”

What happened to the Ordaz family and many of the 4 million Venezuelans who count themselves as middle class was the splintering of a facade of wealth and privilege built on oil and illusions.

“In reality,” one diplomat said, “the dream ended 10 years ago when the price of oil dropped. Venezuelans thought they were the sultans of America, that the price of oil would go up forever. They were wrong.”

Venezuela still has oil, lots of it. But the dreams of $100 a barrel are dead in an oversupplied market that has driven the price to $20 a barrel.

That drop and the continuing stagnation of oil prices have combined with traditional Venezuelan political corruption and panicked governmental policies to leave the country with a collapsed currency, historically high inflation, a wrecked banking system and an economy failing at a record rate.

The effects of the fall have hit every segment of Venezuelan society, particularly the estimated 50% living in poverty, but as one diplomat put it: “The poor here have never expected much, and they cope. It’s the middle class that can’t cope. They don’t know how to do with less.”

Nestor Ordaz seems a textbook example of that assessment, a man with collapsed expectations and broken realities.

“I catered to people who wanted the latest and most expensive imported electronic products,” Ordaz said during an afternoon interview in his upscale home in Caracas’ Macaracuay neighborhood.

“Even after oil collapsed and the economy went down,” people still wanted CD players, new televisions, radios, he said. “But it seems the river just dried up.”

For Ordaz, the first to go was the Miami condo, a two-bedroom apartment overlooking Biscayne Bay.

“We just couldn’t get the dollars to keep up the payments,” he said. “So we stopped traveling, and I had to trade down my cars. The kids are still in (private) school, but there won’t be any U.S. universities. I couldn’t even buy my son the in-line skates I promised for his birthday.”

What’s he going to do?

“I don’t know,” he said, sipping a local beer that replaced the expensive Scotch he used to drink. “Our families can’t carry us, and I really don’t know how to do anything but run a store. I guess I’ll try to hang on and hope things change.”

While Ordaz reflects much of the loss and confusion of the Venezuelan middle class, there are some who see the economic situation as an opportunity.

There is, for instance, the man who asked that he be identified only by his first name, Theodoro, a travel agent with an office near a luxury hotel in the Las Mercedes area of Caracas.

“I’ve made more money in the last nine months than I did in the two years before,” said Theodoro during an interview over a lunch of steak and Chilean red wine.

To Theodoro, the collapse of oil prices and the resulting economic confusion have been godsends, creating a chance, albeit illegal, to break into the big money.

Theodoro is a money seller on Venezuela’s illegal street currency exchange. “It’s the black market,” he said. “The government has made it all possible.”

Since June, the government has frozen the foreign currency exchange rate at 170 bolivars to $1, far from the 235-1 ratio economists say is the real value. In addition, it is illegal to buy dollars from anyone but the government, at the fixed rate.

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By imposing such a strict limit on currency exchange, the government for all intents and purposes has created the possibility for people to cash in by buying and selling money illicitly.

For instance, someone selling $100 on the black market would get 23,500 bolivars instead of 17,000 legally, a gain of 6,500 bolivars. He could then use the 23,500 bolivars to buy dollars at the official rate, which would garner $138, a 38% profit.

The result is that anyone with access to dollars, which Theodoro has, though he will not say how, can make big profits buying and selling on the black market.

“I was truly middle class before,” he said. “I had a 3-year-old Dodge, a two-bedroom apartment, but my wife had to work. We went to the beach during Holy Week and maybe a trip to the mountains. But there was no luxury life like the ones of your other friends (the Ordaz family). They said they were middle class, but they were rich.”

He doesn’t quibble over definitions now.

“I’m rich now,” he boasted as he ordered more wine. “I just bought a (Jeep) Cherokee with a CD player, I’ve got cellular telephones, and I just paid cash for a big house.

“And you know where I’m going for Holy Week? Miami. And I think I’ll buy an apartment there.”

There are enough Theodoros and others who are not quite so blatantly illegal to keep the flights to Miami full, but even that trip is being used more to beat the system here than for enjoyment.

Maria Quintero is the wife of a lawyer who provided her with all the joys of Venezuelan upper-middle-class life: cars, country clubs, foreign vacations, weekly hair appointments and the cellular telephone she used almost constantly.

When the economy and banking system went into a dive, her husband, whose practice centered on arranging bank financing for less-than-reputable foreign investors, disappeared along with the family’s American bank accounts. Maria believes that he is in the United States.

Because the house and cars were paid for, the 40ish Maria still appears to live well, and she makes nearly monthly trips to Miami and Houston, but not for pleasure.

“I go and stay overnight in a cheap hotel,” she said between almost constant gossipy conversations over her cellular phone. “I go to computer stores and electronic stores--Radio Shack should love me--and I buy things to bring back. Then I sell them here. The prices are so much cheaper in the States--and the air fare is only $200--that I can make enough money to keep going.

“It’s not like before; I had to drop the country club, and I’m afraid my car is breaking down, and I’m wearing the same clothes too often, and you can see my hair is a mess, but I’m better off than a lot of people.”

Because Maria has no other source of income, an economic recovery would probably doom her to a life she views with horror.

“If people could buy the televisions and dresses here that I bring back from Miami as cheaply as I sell them, I would have no other way to exist,” she said. “I’d have to get a job, but I’ve never worked. . . . I’d have to ride the subway. I’ve never done that, but I hear it’s cheap.”