At the time of the Europeans' arrival in 1500, there were between one million and eight million indigenous people in Brazil, speaking nearly 170 different languages. The Europeans were seeking pau-brasil, a type of wood that could be processed to yield a rich red dye. Coastal Indians were induced to cut and sell timber in return for metal implements such as axes. It was an efficient system, so much so that within a little more than a generation, the trees -- which had by then given their name to the country -- were all but nonexistent.

But the Portuguese colony soon found a better source of income in sugar, the cash crop of the 16th century. Sugar cane grew excellently in the tropical climate of northeast Brazil. Turning that cane into sugar, however, was backbreaking work, and the Portuguese were critically short of labor. So the Portuguese began to import slaves from West Africa. Brazil was soon one leg on a lucrative maritime triangle: guns and supplies from Portugal to Africa, slaves from Africa to Brazil, sugar from Brazil back to Europe. Within a few decades, colonial cities such as Salvador and Olinda were fabulously rich.

In the early 1700s, gold was uncovered in what would later be Minas Girais. In addition to the miners, the other main beneficiary of the Minas gold rush was Rio de Janeiro, the major transshipment point for gold and supplies. In recognition of this, in 1762, the colonial capital was officially transferred to Rio. It would likely have remained little more than a backwater colonial capital had it not been for Napoleon. In 1807, having overrun most of western Europe, the French emperor set his sights on Portugal. Faced with the imminent conquest of Lisbon, Portuguese Prince Regent João (later King João VI) fled to his ships, opting to relocate himself and his entire court to Brazil. In 1808, the king and 15,000 of his nobles, knights, and courtiers arrived in the rather raw town of Rio. When the king returned to Portugal in 1821, Brazilians -- among them the king's 23-year-old son, Pedro -- were outraged at the prospect of being returned to the status of mere colony. In January 1822, Pedro announced he was remaining in Brazil. Initially, he planned on ruling as prince regent, but as the year wore on, it became clear that Lisbon was not interested in compromise, so on September 7, 1822, Pedro declared Brazil independent and himself Emperor Pedro I.

Brazil in this period was a deeply conservative country, with a few very wealthy plantation owners, a tiny professional class, and a great mass of slaves to cultivate sugar or Brazil's new cash crop, coffee. Though the antislavery movement was growing worldwide, Brazil's conservative landowning class was determined to hold on to its slaves at all costs. In the 1850s, under heavy pressure from Britain, Brazil finally moved to halt the importation of slaves from Africa, though slavery wasn't officially outlawed until 1888. Seeking a new source of labor, in 1857 Brazil opened itself up to immigration. Thousands poured in, mostly Germans and Italians, settling themselves in the hilly, temperate lands in the south of Brazil.

When reformist army officers and other liberals staged a coup in 1889, the 57-year rule of Pedro II (son of the first emperor) came to an end. The republic that took its place had many of the same ills of the old regime. Corruption was endemic, rebellions a regular occurrence. Finally, in 1930, reformist army officers staged a bloody coup. After several days of fighting, a military-backed regime took charge, putting an end to the Old Republic and ushering in the 15-year reign of the fascinating, maddening figure of Getúlio Vargas.

Vargas began his time in office as a populist, legalizing unions and investing in hundreds of projects designed to foster the industrial development of the country. When the workers nonetheless looked set to reject him in renewed elections, Vargas tore up the constitution and instituted a quasi-fascist dictatorship, complete with a propaganda ministry that celebrated every action of the glorious leader Getúlio. In the early 1940s, when the United States made it clear that Brazil had better cease its flirtation with Germany, Vargas dumped his fascist posturing, declared war on the Axis powers, and sent 20,000 Brazilian troops to take part in the invasion of Italy. When the troops came home at war's end, the contradiction between the fight for freedom abroad and the dictatorship at home proved too much even for Vargas's political skills. In 1945, the army removed Getúlio from power in a very quiet coup. In 1950, he returned, this time as the democratically elected president, but his reign was a disaster, and in 1954, he committed suicide.

In 1956, Juscelino Kubitschek (known as JK) took office, largely on the strength of a single bold promise: Within 4 years, he would transfer the capital from Rio de Janeiro to an entirely new city located somewhere in Brazil's vast interior. The site chosen in Brazil's high interior plateau (the sertão) was hundreds of miles from the nearest paved road, thousands from the nearest airport. Undaunted, JK assembled a team of Brazil's top modernist architects -- among the best in the world at the time -- and 4 years later, the new capital of Brasília was complete.

Democracy, unfortunately, did not fare well in the arid soil of the sertão. In 1964, the army took power in a coup, ushering in an ever more repressive military dictatorship that would last for another 20 years. For a time, no one complained much. Thanks to massive government investment, the economy boomed. São Paulo, which had been little more than a market town in the 1940s, exploded in size and population, surpassing Rio to become the heart of Brazil's new manufacturing economy. These were the days of the Brazilian "economic miracle."

In the early '70s, however, it became clear that much of the economic "miracle" had been financed on easy international loans, much of that invested in dubious development projects (roads that disappeared into the forest, nuclear power plants that never functioned) or channeled directly into the pockets of various well-connected generals. The international banks now wanted their money back, with interest. As discontent with the regime spread, the military reacted with ever-stronger repression.

The 1980s were perhaps Brazil's worst decade. Inflation ran rampant, while growth was next to nonexistent. Austerity measures imposed by the International Monetary Fund left governments with little money for basic infrastructure -- much less social services -- and in big cities such as Rio and São Paulo, favelas (shantytowns) spread while crime spiraled out of control.

In the midst of this mess, the army began a transition to democracy. In 1988, in the first direct presidential election in over 2 decades, Brazilians elected a good-looking millionaire named Fernando Collor de Mello. It proved to be a bad move, for Collor was soon found lining his pockets with government cash. The civilian government did prove capable of legally forcing him from office, however, paving the way in 1992 for the election of Fernando Henrique Cardoso.

Though an academic Marxist for much of his career, once in office FHC proved to be a cautious centrist. In his 8 years in office, he managed to reign in inflation, bring some stability to the Brazilian currency, and begin a modest extension of social services to Brazil's many poor.

The main opposition throughout this period was the Workers Party (PT), led by Luiz Inácio Lula da Silva, a charismatic trade unionist with a personal rags-to-riches story. Born into poverty in the Northeast, Lula, as he is usually known, left school to work as a shoeshine boy, got a job in a São Paulo factory, joined the metal workers' union, and began to get involved in politics. During the waning days of Brazil's dictatorship, he and others formed the Workers Party and only just lost Brazil's first democratic election in 1988. Lula persevered, however and, finally, in 2002, in his fourth attempt, was elected Brazilian president, the first democratically elected leftist to hold power in Brazil.

Brazil Today -- Hopes for Lula's first term in office were enormous. Confounding expectations of financial markets and right-wing critics, Lula in office proved to be an economic moderate, continuing the tight-money policy of his predecessor. But to the disappointment of his supporters on the left, Lula also proved to be a poor and often absent administrator. Many of the hoped-for reforms -- to the distribution of land, to access to education and health care, to environmental policy -- were never enacted. His government has been plagued with scandal. Allegations of illegal campaign contributions and diversion of government funds has led to the resignation of a half dozen of Lula's chief ministers.

Lula's one signal accomplishment was a program -- called Bolsa Familia -- designed to provide basic income support to very low-income families. The popularity of this program, combined with a continued strong economy, was enough to win Lula reelection in 2006. Barred from seeking a third term, Lula is now seeking to position a successor to carry the elections in 2010.

In the cities, things have certainly improved. Governments have paid off the worst of the '80s debts and have funds available to spend on increased policing, better street lighting, and extending services such as sewers, water, and schooling to urban slum dwellers. Though gangs remain stubbornly entrenched in many of the favelas of Rio and São Paulo, a new program in Rio de Janeiro is reoccupying favelas one by one, removing the gangs and replacing them with community police stations. All in all, the major cities of Brazil are cleaner and safer than they've been in a generation. Though they're a few years yet from matching post-Giuliani Manhattan for safety, Brazil's cities are far and away superior when its comes to sheer joie de vivre.

In recent years Brazil's burgeoning growth rate has put the country in the top tier of world economies. Perhaps to showcase its new status, Brazil has won the right to host some of the world's premier sporting events. In 2014, the FIFA Soccer World Cup will be held in nearly a dozen cities across Brazil. Two years later, tens of thousands of athletes and fans will descend on Rio de Janeiro to compete in and watch the 2016 Olympic Summer Games. This will mark the first time the games have ever been held in South America.

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