Everything about Brazil is oversized – the population (at 217 million, the largest in Latin America), the land mass (fifth largest on earth) and by almost everyone’s reckoning, the economic potential. But so, alas, are its chronic problems that range from a lack of economic mobility to social divisions that undermine its capacity to make collective sacrifices in the quest for prosperity. There are signs – there have long been signs – that Brazil could pull itself up by the bootstraps. Much of the world rides in passenger jets made in Brazil, works in office buildings erected with Brazilian steel, eats soy grown in Brazil and learns from Brazil’s expertise in extracting oil in ultra-deep waters. Three of the eight largest hydropower installations on earth are located in Brazil, and more than half of Brazil’s energy consumption is derived from renewable sources. But to turn promise into plenty, Brazil needs to make hard decisions that prioritize growth and poverty reduction over the care and feeding of entrenched interest groups. It won’t be easy – but the gains would be worth the pain.

Moving forward—or not—with structural reforms aimed at enhancing fiscal adjustment and lifting private investment will define whether a sustainable—or unsustainable—growth-cum-debt trajectory will prevail in Brazil in the next decade. The extent to which its economy regains its attractiveness for foreign investors will play a key role.