Under President Luiz Inácio Lula da Silva, Brazil's economy is booming, including construction in vibrant São Paulo.
Brazil's turnaround is also underwritten by its abundance of natural resources and prowess in agriculture. In a world clamoring for more energy and food, Brazil has plenty of both.
Under the Atlantic south of Rio—and then beneath 10,000 feet of sand and rock and 6,600 feet of salt—lies an oil and gas field called Tupi, judged last year to have between 5 billion and 8 billion recoverable barrels. It was the largest global find since 2000 in Kazakhstan. Then came the icing on the cake: news of another massive, untapped offshore field known as Carioca that estimates suggest might hold as much as 33 billion barrels of oil. One official compares Brazil of the future to oil powers like Venezuela and Saudi Arabia.
Meanwhile, back on land, the news is nearly as good. Brazil has emerged as the world's leading exporter of biofuels, the result of near-ideal growing conditions for sugar cane and a decades-long national drive to develop ethanol. The country's vast savannas have also become the launching pad for Brazil to become a global agricultural powerhouse. Brazil is now the No.1 world exporter of beef, poultry, sugar, coffee, and orange juice—and is gaining in soybeans, corn, and pork. Scientific breakthroughs in tropical farming and an amount of arable land unmatched on the planet could, in time, make the country the leading global breadbasket.
Nonetheless, Brazil's new confidence is tempered with a sense that its rise remains vulnerable. Inadequate education and training mean there are too few Brazilian engineers, programmers, and other experts to sustain growth. The infrastructure of roads, railways, and ports falls well short of what an economic great power will need. The political will to fund the overhaul—and proceed with more economic reforms—is weak. High taxes and political corruption still hinder the country's rise. And intense pockets of crime—famously in the slums, or favelas, of big cities like Rio—along with outbreaks of mosquito-born dengue fever suggest the nation's ascendance has a long way to go.
Still, with its new economic clout, Brazil is edging out onto the world stage. It midwifed this year a process of economic integration among South American nations, and it is leading efforts to create a South American Defense Council. Lula is traveling the world, and Brasilia is stepping up foreign aid. "Lula is seen as a balancer for the region," says an official in Brasilia.
Warm relations. On a continent that has veered to the left—with some strident anti-U.S. notes—Brazil exerts influence that Washington welcomes. Brazil, says Thomas Shannon, assistant secretary of state for Western Hemisphere affairs, "is a natural stabilizing force in the region."
President Bush is said to count relations with Brazil as a success and, according to the U.S. ambassador in Brasilia, Clifford Sobel, Brazil has been added to a list of allies and friendly states most important to America. Says Shannon, "How we work with Brazil is going to be as important as how we work with China and how we work with India."
Bush and Lula have developed an amiable relationship—unexpectedly so, given such different ideologies and class backgrounds. Lula uses sports metaphors in private, and both joke about dealing with legislators and the news media. "They have a similar way of being very direct," says Brazilian Ambassador to the United States Antonio Patriota. "It helps to grease the relationship," adds Marco Aurélio Garcia, Lula's top foreign policy adviser.
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