Brazil's moment: Rio's selection as the site of the 2016 Olympics confirms Brazil's rise as a Latin American, and global, power.

• Author: Barrionuevo, Alexei
• Position: Cover story

When the announcement came in early October that Rio de Janeiro had been chosen to host the 2016 Olympics, 16-year-old Tatiana Dornellas and her family began screaming and jumping up and down.

"It's so good to see my country more known abroad, more respected," says Tatiana. "I feel proud to say I'm from Brazil. 'Olympic town' is such a strong adjective, don't you think?"

Her pride in Brazil's selection was echoed across the country, as thousands of Brazilians poured onto the streets and beaches to celebrate. The International Olympic Committee's decision to entrust the summer games to Brazil which will be the first South American nation to host them--seemed to confirm the nation's arrival as a serious player on the world stage.

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"The Olympics are a crowning achievement in the efforts that Brazil has made to participate actively in world affairs," says Amaury de Souza, a political analyst in Rio.

With close to 200 million people, Brazil is the world's fifth most populous country and has the largest economy in South America. It has a booming agricultural sector, a diversified industrial base, and untapped natural resources, including enormous recent oil finds that are expected to thrust Brazil into the ranks of the world's oil powers in the years ahead.

A GROWING MIDDLE CLASS

Economists say Brazil is now poised to realize its potential as a global player. The growth is being felt across the economy, creating a new class of super rich--in 2007, the number of Brazilian millionaires grew by 19 percent--but also significantly expanding the middle class.

Long famous for its unequal distribution of wealth, Brazil's income gap--the gap between rich and poor--has shrunk more than any other country in South America this decade, according to the World Bank. While the top 10 percent of Brazil's earners saw their cumulative income rise by 7 percent from 2001 to 2006, the bottom 10 percent shot up by 58 percent, according to the Getulio Vargas Foundation in Rio.

People are using their new wealth to buy consumer goods like TVs, refrigerators, and furniture, and this consumer-spending is fueling even more economic growth.

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As the United States and Europe struggle with recession, Brazil's diversified economy seems to be holding up better. Even though exports of commodities like oil and agricultural goods have driven much of Brazil's recent economic gains, the growth of Brazil's domestic market and its increased spending power has provided something of a cushion.

"What makes Brazil more resilient is that the rest of the world matters less," says Don Hanna, the head of emerging-market economics at Citibank.

While Brazil has made great strides in recent years, challenges remain. There's still a great deal of poverty, crime is widespread, and violent gangs control large swaths of Rio de Janeiro's slums, known as favelas. In...