In 1929, the global economic crisis weakened the coffee planters' hold on the government and an opposition Liberal Alliance was formed with the support of nationalist military officers. When the Liberal Alliance lost the election in 1930, the military seized power on their behalf and installed the Liberal leader, Getúlio Vargas, as president. Vargas, whose regime was inspired by Mussolini's and Salazar's fascist states, dominated the political scene for the next 24 years, until he was forced out of office in 1954.

His replacement, Juscelino Kubitschek, was the first of Brazil's big spenders; he built Brasília, the new capital, which was supposed to catalyze the development of the interior. By the early 1960s, the economy was battered by inflation, partly because of the expense of building the new capital, and fears of encroaching communism were fueled by Castro's victory in Cuba. Again, Brazil's fragile democracy was squashed by a military coup in 1964. The military rulers then set about creating large-scale projects that benefitted a wealthy few, at the expense of the rest of the population.

In the mid-1980s, Brazil's economic miracle, supported largely by loans from international banks, petered out and the military handed power back to a civilian government. In November 1989, Brazilians had their first opportunity to elect a president by popular vote in almost 30 years, and elected Fernando Collor de Mello, ex-karate champion, over the socialist Luíz da Silva, by a narrow but secure majority. Collor gained office promising to fight corruption and reduce inflation, but by the end of 1992, the man who had once reminded George Bush Snr of Indiana Jones had been removed from office and was being indicted on charges of corruption - accused of leading a gang that used extortion and bribery to suck more than US$1 billion from the economy. (He escaped prison.)

Vice President Itamar Franco became president in December 1992 on Collor's resignation, and with the introduction of a new currency, the real, stabilized the economy. In November 1994, Fernando Cardoso, architect of the Plano Real (Real Plan) was elected president. Through the mid-1990s Cardoso presided over a Brazil with a growing economy, stable currency and record foreign investment. These achievements were offset by the legacy of longstanding problems: the loss of two million jobs between 1989 and 1996 and ongoing problems with agrarian reform; a 1996 United Nations report showed that Brazil had the world's most unequal distribution of wealth.

The country's ongoing problems didn't stop Cardoso from persuading congress to change the constitution to allow him a second term, and he comfortably won a second four-year term in 1998. Following the election the real had to be devalued, ushering in a period of belt-tightening, but by 2000 the economy was growing again.

Brazil's 2002 presidential election swung the country's political agenda to the left when Workers Party (PT) candidate Luíz Inácio 'Lula' da Silva won 61% of the vote. Lula (as he's fondly called) secured the vote by promising to curb hunger and create jobs. Brazil's other big boy of the year was Ronaldo, the oddly coiffed football striker whose two gols against Germany in the World Cup final captured the cup - the country's fifth title - for Brazil.