After decades of stop-and-start growth and political disorder, Brazil today seems poised to finally fulfill its long-unrealized potential as a global player. The key features of Brazil's awakening are widely recognized: expanded exports, oil discoveries, financial stability, low inflation, growing foreign and domestic investment, booming consumer demand, social assistance focused on the neediest, and democratic political cohesion. Brazil's diverse economy is now founded on strong sectors in oil, mining, agriculture, and, more recently, biofuels -- all of which have benefited from a combination of technological advancements and strong incentives for private investment. The country now boasts a GDP of $1.58 trillion, which ranks in the top ten worldwide.
Brazil's ascendance is not the result of lucky breaks. Although global factors, such as rising commodity prices and easy access to foreign capital, have helped, there has been no tropical alchemy or voodoo economics. The secret of Brazil's current success lies in the continuity of its sound economic and political management. Over the past five years, under the leadership of President Luiz Inácio Lula da Silva (known as Lula), Brazil has continued the market-friendly economic policies begun by previous governments that tamed inflation and stimulated private investment.
Still, Brazil remains a work in progress. Continued stability and future growth will require avoiding the mistakes of the past while finding new solutions to the problems that remain. These include rampant corruption, stalled tax and labor reforms, low levels of domestic saving, inadequate achievements in public education, and not enough highly skilled labor. Successfully resolving such issues would allow Brazil's rise to continue, and Brazil -- long viewed as a peripheral country -- would finally become a global player.
MORE THAN A PETROSTATE
Brazil's booming economic growth and newfound geopolitical importance became especially clear last year with the discovery of major new oil and gas deposits under the South Atlantic continental shelf in Brazilian waters. An initial find in the Gulf of Santos was quickly followed by others, and by mid-2008 it was being hailed