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STEVE INSKEEP, host:

This next story begins with an old joke about Brazil.

RENEE MONTAGNE, host:

Brazil is the country of the future, and always will be. That old line may finally be out of date. Brazil is demanding to be taken seriously, and this week, we'll look at a rising nation.

INSKEEP: The country has a growing economy and a popular government. That growing economy is helping to lift millions of people out of poverty and into the middle-class. Innovative state programs are helping, too.

MONTAGNE: Fighting poverty is a priority for the country's president, Luiz Inacio Lula da Silva. As a boy, the future president shined shoes on the street. NPR's Juan Forero reports.

(Soundbite of music)

JUAN FORERO: The music that greets shoppers at the Contown(ph) store in Rio's snazziest malls says it all: hip, modern, on the go.

Hanatto Mancini(ph) is a buyer for the upscale store and says business is good as she walks amid racks of bright colored skirts and blouses.

Ms. HANATTO MANCINI (Buyer, Contown Store): (Portuguese spoken)

FORERO: Fingering the clothing, Mancini says the designs show originality and the highest of quality.

(Soundbite of sewing machine)

FORERO: Quality that's a trademark at Alan Roberto Lima's(ph) small sewing shop. It's located on a narrow residential street in a rough-and-tumble neighborhood, one far from Rio's glitz.

Lima, 34, is big and stoic, characteristics that served him well in the past when he was dealing cocaine. But Lima says he turned to fashion a few years ago when he took stock of his life. It helped that Brazil was then beginning its economic transformation. He started by making t-shirts and shorts right in his own home.

Mr. ALAN ROBERTO LIMA (Sewing Shop Owner): (Portuguese spoken)

FORERO: Lima gives credit to the government of President Lula for putting the economy on track and keeping it there. He calls it a revolution. That revolution means Lima has joined the middle class. He owns a house, a car, and he's selling clothes to some of Rio's trendiest shops.

Mr. LIMA: (Portuguese spoken)

FORERO: He says he's now thinking of creating his own clothing line, once he makes an investment in newer, more modern machinery. He even dreams of owning a shop in Rio's wealthy south, right on the beach.

This country, larger than America's lower 48, was always said to be on the cusp of prosperity, yet one crisis after another held it back: hyper-inflation, oil shocks, the Asia crisis, devaluations and defaults. But today, Brazil is surviving economic downturns better than just about any country in the world. The economy is poised to once again grow by five percent. And political analysts say Lula's steady hand has won admirers the world over. That was never more apparent than in October.

President LUIZ INACIO LULADE SILVA (Brazil): I have the honor to announce that the games of the 31st Olympiad are awarded to the city of Rio de Janeiro.

(Soundbite of cheers)

FORERO: Economists say Lula has been a responsible steward of the economy, following the lead of his predecessor, Fernando Henrique Cardoso, who tamed inflation. Brazil is still a country of desperate poverty, and in its poor slums, untold violence. And Brazil's business climate is far from perfect. Economists say an overbearing state makes it a slog to start an enterprise. Roads and ports need vast improvements. Corruption is still a scourge.

But perhaps for the first time, a child born in poverty in Brazil is not condemned to die poor. And despite the red tape, businessmen are bullish about this country, which has embraced globalization.

Now Brazil's the world's eighth largest economy. That growth is trickling down, with 8.5 million jobs created since 2003 and 32 million people joining the middle class, according to Marcelo Neri. He's the chief economist at the Center for Social Policies at the Getulio Vargas Foundation, a think tank.

Mr. MARCELO NERI (Chief Economist, Center for Social Policies, Getulio Vargas Foundation): Brazil's really having a wonderful time now in terms of collecting harvests and very good results. We used to say that Brazil's the country of the future. The future is now. It's going on, I mean, occurring now.

FORERO: But it's not just the healthy economy that's helping Brazil's masses. It's programs like Bolsa Familia which provide food payments to millions. In exchange, recipients must make sure their kids are in school. There are also low-interest loans for new home buyers and for small businesses.

One of Rio's most forbidding districts is Rocinha. It has a reputation as a tough favela, or slum. But it's also filled with opportunities. The evidence: new business cropping up, or old businesses doing better.

Teracina Lopez Veda da Silva(ph) sells spices and peppers from a street stand, but she's not just a street vendor. She has a successful business selling to upscale restaurants. She credits a robust business environment for her good fortune and also two government-backed loans.

Ms. TERACINA LOPEZ VEDA DA SILVA (Business Owner): (Portuguese spoken)

FORERO: She says they helped her buy supplies in bulk, meeting the demands of her customers. Over the years, she saved up to buy two homes. She's not the only one making purchases, though.

(Soundbite of crowd chatter)

FORERO: The Buncha Frio(ph) Appliance Store in downtown Rio is filled with shoppers, and the store is offering refrigerators, stoves, furniture and washing machines at good prices. Shoppers here, as in practically all the major stores in Brazil, are offered credit at low interest. Duncinea Fahida(ph) bought her first computer two months ago. Now she's looking for a new fridge.

Ms. DUNCINEA FAHIDA (Psychologist): (Portuguese spoken

FORERO: She says Brazil is much better now. She also says Brazilian friends who'd created new lives for themselves in New Jersey, Florida and Italy are coming back. Fahida recalls growing up poor and how she and her family toiled a way to pay for her education. She's now a psychologist, and she says proudly that she's a member of Brazil's expanding middle class.

Juan Forero, NPR News.

MONTAGNE: Tomorrow, Juan reports on Brazil's emergence as a major oil state after it discovered vast deposits off shore.

Mr. JOSE SERGIO GABRIELLI (President, Petrobras): We are, to date, the fifth largest company worldwide in all sectors.

MONTAGNE: And that's the president of Brazil's big oil company Petrobras. We'll hear more from him tomorrow.

(Soundbite of music)

MONTAGNE: This is NPR News.

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