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São Paulo: The Best—and Worst—of Latin America
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Luiz Inacio Lula da Silva spent eight years confounding expectations as the president of Brazil. Perhaps no moment better exemplified Lula's ability to defy easy categorization than his appearance last September at the Bovespa, São Paulo's stock exchange. Lula—a gruff, bearded, working-class leader—was there to celebrate history's biggest-ever sale of stock, a $68 billion offer to government and private investors of new shares in the oil company Petroleo Brasileiro SA, usually known as Petrobras. The sale made Lula—critic of capitalism and champion of the poor —the head of the world's fourth-largest company by market value, a corporate titan nearly the size of ExxonMobil. Even Lula, who was three months from leaving office, seemed surprised by the situation.

"Ten years ago I came here and people shook with fear to see me, this devourer of capitalism," Lula told the bankers, brokers and government officials gathered on the floor of the exchange. "Well, this devourer of capitalism is leaving office having honorably participated in the most auspicious moment in the history of capitalism. For some this means little, for some nothing. For me, it means everything that this is happening—not in Frankfurt, not in London, not in New York, but in São Paulo. It's on our Bovespa that we have consecrated the greatest capitalization in the history of world capitalism."

Surprising or not, the Petrobras sale and Lula's place at center stage were emblematic of São Paulo's rise to prominence as an international financial center and the country's new confidence after decades of debt, stagnation, inflation, political turmoil and social unrest. For one of the few times in Brazil's history, it seemed like the country's poor—the key to its potential—might be able to get their cut of the nation's undeniable wealth and power. It seems as if the place once ridiculed by Charles de Gaulle as "not a serious country" might finally get its due.

Always a Surprise

Brazil owes its economic ascendance in large measure to São Paulo. Home to 20 million people, it is the third largest metropolitan area in the Americas after Mexico City and New York. To a first-time visitor arriving by air, the sight of the city is always a surprise. São Paulo is an almost endless expanse of white concrete buildings rising out of green jungles and rugged mountains. Unlike Manhattan, there is no shiny, metallic up-thrust between the river and sea.

While just about anything seems to grow in São Paulo's fertile soil, its residents have found it more convenient and profitable to pave over and build on every inch of space, turning the city into the quintessential concrete jungle. The stench of a thick ooze in the rivers that run past the city can burn your eyes, irritate your lungs, make your skin greasy and sap your strength.

While the city has hills and other landmarks, you can't see them or much else from the street. Many visitors become utterly lost if they wander away from the Avenida Paulista, the wide, ridge-top street that was once lined with the mansions of coffee barons and is now home to banks, museums, and soaring radio towers lit with advertisements. There is no real downtown. The city center is still active, but there are illegal squats and crack dens not far from its remaining banks and businesses. The stock market is there, but no longer hosts any floor trading. Most big companies moved to the Avenida Paulista decades ago. Many have since moved from the Paulista to the Faria Lima district, then further still, to the Marginal Pinheiros, and finally even beyond the shantytowns, where land is cheap, building codes lax and real-estate fashions more up to date.

With the largest population of Brazil's 27 states, São Paulo is responsible for about 40 percent of the economic output in the country, which has the world's eighth largest economy. If the state of São Paulo were a country, its economy would be the world's 16th largest. São Paulo boasts an...

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