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Ever since the global financial crisis erupted in 2008, Brazilian officials have been bragging about their country’s resilience and castigating the failures of Western policymakers. “People ask me about the crisis, and I answer, ‘Go ask Bush.’ It is his crisis, not mine,” then Brazilian President Lula da Silva said shortly after the collapse of Lehman Brothers. Six months later, Lula infamously declared that the crisis “was fostered and boosted by the irrational behavior of people who were white and blue-eyed, who before the crisis they looked like they knew everything about economics, but now have demonstrated they know nothing about economics.” Several weeks ago, Lula’s successor, Dilma Rousseff, pointed to renewed global financial turmoil and boasted, “this is the second time that a crisis affects the world, and it is the second time that Brazil doesn't shake.”

Her cockiness is understandable. The resource-rich Brazilian economy, Latin America’s biggest, grew by 7.5 percent in 2010, its fastest annual rate of expansion since 1986. The country has received massive amounts of foreign direct investment, especially from China; it has discovered vast new oil deposits; and its commodities have been booming. Thanks to Lula and his predecessor, Fernando Henrique Cardoso, Brazil enjoys stable, market-oriented economic policies. Its poverty rate has fallen tremendously: Nearly 30 million Brazilians, according to a new Council on Foreign Relations report, entered the lower middle class between 2003 and 2009. The anti-poverty gains were partly attributable to Bolsa Família, Brazil’s hugely successful cash-transfer program, which is now being emulated around the world.

Yet despite its white-hot growth and undeniable progress on poverty reduction, Brazil is still a developing country with a host of developing-country problems. Leaving aside its current inflation woes and economic slowdown, Brazil suffers from excessively high taxes, burdensome regulations, rampant corruption, shoddy infrastructure and a chronically weak education system. In the Wall Street Journal/Heritage Foundation Index of Economic Freedom, it ranks 113th out of 179 economies, below the likes of Gabon and Nigeria. In the World Bank’s Ease of Doing Business Index, Brazil ranks 127th out of 183 economies, right behind Mozambique, and it places even lower (152nd) in “ease of paying taxes” subcategory. As for graft and transparency, President Rousseff, who took office in January, has already lost several government ministers to corruption scandals.

Amid all the scandals, Brazil is busily preparing for the 2014 FIFA World Cup and the 2016 Summer Olympics, both of which will be held in Rio de Janeiro. Writing in Americas Quarterly, economist Andrew Zimbalist notes that the obstacles to finishing the necessary construction “include labor shortages, bureaucratic encumbrances, political corruption, legal entrapments, insufficient funds, incompetence, and inadequate infrastructure.” The former soccer superstar Pelé, Brazil’s most famous athlete of all time, “has warned that the country is at risk of embarrassing itself before the world.”