Exports, slavery and patriarchy have   been the three constants of Brazilian   history. The export orientation of the   colonial economy shaped Brazil's   society. Even the name "Brazil," like   the country itself, is suggestive of   commerce and the pursuit of wealth.   Brazil's name derives from the   brazilwood trees from which   Europeans sought in the sixteenth   century to make valuable red dyes.   However, the central fact of the   country's history was the exploitation   of cheap labor, first as slaves, then   as wage-earners. Indeed, Brazil's   history is the story not only of   conquest but also of the   enslavement of its native peoples   and of millions of imported African   slaves.

  Following three centuries under the   rule of Portugal, Brazil became an   independent nation in 1822. By far   the largest and most populous   country in South America, Brazil has   overcome more than half a century of   military intervention in the   governance of the country to pursue   industrial and agricultural growth and   development of the interior.   Exploiting vast natural resources and   a large labor pool, Brazil is today   South America's leading economic   power and a regional leader. Highly   unequal income distribution remains   a pressing problem.  

  Mining of gold and diamonds from   the 1690s to the 1750s carried   Portugal's effective occupation of the   land far into the interior of what are   now the states of Minas Gerais,   Goias, and Mato Grosso. Minas   Gerais became the new jewel in   Portugal's crown, although one that   was difficult to keep in place. As   more people spread to the distant   interior, many of them were living   beyond the reach of royal officials.   Indeed, one of Brazil's distinctive   features has always been the   existence of people who live within   the boundaries of the country but   outside the limits of the society and   the controls of the state.

  Because Paulistas (residents of the   state of Sao Paulo) made most of   the initial gold strikes, Sao Paulo   was connected to all the mining   areas. The importance of Minas   Gerais and the mines farther inland   led the crown to transfer the   viceregal capital from Salvador,   Bahia, to Rio de Janeiro in 1763.

  Gold production declined in the later   decades of the eighteenth century,   and from about 1820 coffee   cultivation provided a fourth period   that lasted to the end of the 1920s. It   began in the mountains behind Rio   de Janeiro, moved along the Rio   Paraiba Valley to the west across   Sao Paulo State and out into   Parana. Coffee powered the rise of   Sao Paulo and its port of Santos,   and although it gradually took a   secondary position to   industrialization after the late 1930s,   Brazil remained the world's major   coffee producer.

  By the 1970s, Brazil had the world's   third largest commercial air fleet after   the United States and the Soviet   Union. The 1950s push to develop an   automotive industry was followed in   later decades by large-scale   construction of long-distance   highways, which by the 1980s made   it possible to travel to all regions of   the country on paved roads.   Symbolic of this era was the building   of Brazil's third capital at Brasilia   (1955-60) on the plains of Goias. The   internal combustion engine and the   coinciding growth of the petroleum   industry also made possible the   mechanization of agriculture, which   changed rapidly the face of the   Brazilian west and made Brazil the   second largest exporter of food in the   1980s. The combination of highways   and automotive transport opened up   Amazonia for the first time. The   construction of the highway corridors   from Brasilia to Belem and from   Cuiaba to Porto Velho to Manaus   triggered large-scale migration,   mining and agricultural development,   timbering, land disputes,   displacement of native peoples, and   massive deforestation. The latter   made Brazil's Amazon policies the   subject of world debate, which in turn   made Brazilians worry about the   security of their immense North   region (Amazonia).

   Possessing large and well-  developed   agricultural, mining,   manufacturing,   and service sectors,   Brazil's   economy outweighs that of   all other   South American countries   and is   expanding its presence in   world   markets. The maintenance of   large   current account deficits via   capital   account surpluses became   problematic as investors became   more risk averse to emerging market   exposure as a consequence of the   Asian financial crisis in 1997 and the   Russian bond default in August   1998. In January 1999, the   BrazilianCentral Bank announced   that the real would no longer be   pegged to the US dollar. This   devaluation helped moderate the   downturn in economic growth in 1999   that investors had expressed   concerns about over the summer of   1998, and the country posted   moderate GDP growth. Economic   growth slowed considerably in 2001-  02 - to less than 2% - because of a   slowdown in major markets and the   hiking of interest rates by the Central   Bank to combat inflationary   pressures. New president DA SILVA,   who took office 1 January 2003, has   given priority to reforming the   complex tax code, trimming the   overblown civil service pension   system, and continuing the fight   against inflation.