Brazil emerged from twenty-one years of military rule in 1985 and has had four Presidents since. The dominant theme throughout this time has been the economy. President Fernando Collor de Mello began the process of opening the economy and privatising its commanding heights in 1990. Under his successor, Itamar Franco, the dragon of hyper-inflation was finally slain with the introduction of a new currency, the Real (R$), at parity to the US Dollar.

The man generally credited for the "Real Plan", Fernando Henrique Cardoso, succeeded Franco in 1995 and was re-elected for a second four year term, which ended on 31 December 2002. Under President Cardoso Brazil became a more assertive and confident player on the world stage. This is particularly true in multilateral trade negotiations where Brazil champions the cause of market access for agricultural goods and an end to trade distorting export subsidies. At home the Cardoso administration pushed forward policies of economic liberalisation and rolled back the boundaries of the state. The government, however, never really recovered its reputation for sound management of the economy after the devaluation crisis of 1998/9. And although some important structural reforms were subsequently put in place, the country remains vulnerable to outside shocks due to its dependence on foreign capital.

The Workers Party under Luiz Inacio "Lula" da Silva won the presidential election in October 2002 exploiting widespread impatience with stop-start growth, high unemployment and depressed incomes. It is the first time a government of the left has won power in Brazil. Key challenges include building a solid coalition in Congress and making progress in key areas such as tax and social security reform that have eluded previous administrations.