BRAZIL Forgotten Giant.

Is South America's largest country ready to lead?

"How often do I Pay soccer? Do you mean, how many times a day?" Anderson Barbosa, 12, smiles as he answers, "At least twice a day."

Soccer, or futebol, as it is called in Brazil, is the national sport. Anderson and Felipe Neries, 11, are kicking a ball around on the beach in Rio de Janeiro. It's a winter afternoon in May (the seasons are reversed in the Southern Hemisphere). But the chilly weather doesn't spoil their fun.

Both boys speak Portuguese, Brazil's national language. But their backgrounds are quite different. Anderson's ancestors came from Portugal; Felipe's ancestors from Africa.

Brazil is a mix of peoples and cultures. Its people are descended from European settlers; Africans brought here as slaves immigrants from Asia; and Amazonian Indians.

"Brazil is great," says Felipe. "Everybody gets together, plays soccer together, and has fun together."

"Some people are racist," Anderson adds. "But I go to a public school, and blacks are mixed with whites. There is no racism there and everyone is treated equally."

A Huge Country

Brazil is a huge country, rich with resources. But until now, it has never been a world leader.

"Brazil is the fifth-largest country in the world," says Anderson, whose favorite subject is geography. "The main difference between Brazil and the U.S. is technology. The U.S. spends lots of money on technology. But Brazil has never sent a shuttle into space.

"In the U.S., most people stay home and play with their computers," Anderson adds. "But here in Rio, we go to the beach and have fun."

Brazilians are known for their love of life. But for many, each day is a struggle.

Brazil has the most uneven distribution of wealth in the world, so a huge gap exists between rich and poor. The richest 10 percent of Brazilians own 65 percent of the nation's wealth.

In the cities, the gap is narrowing, due to the growth of a middle class. But in rural areas, the difference is stark. Five percent of the people own 80 percent of the land. Many peasants own no land at all.

Land reform has run into fierce resistance from landowners. In the past 10 years, more than 1,000 land-reform activists have been killed.

For many years, poverty has driven peasants to the cities, where they build shacks in slums known as favelas. Often, these shacks lack plumbing and sanitation.

"In Brazil, there's a big problem with poverty and unemployment," Anderson admits. "Poor people who don't have houses go to the hills surrounding Rio and build shacks."

"Violence is another big problem," says Felipe. It's never happened to me or people I know, but I hear about it."

The Other Brazil

Like Anderson and Felipe, most of Brazil's people live within 200 miles of the coast (see the population density map, p. 13). The huge interior is sparsely settled.

The Amazon rain forest makes up half of Brazil. Until 1960, when the Trans-Amazon Highway was built, getting to the rain forest was difficult.

But no longer. Now, loggers cut down the trees and peasants clear the land for farms. As a result, Indians face extinction.

"People are destroying the rain forest," says Anderson, "cutting and taking the trees illegally."

It was 500 years ago that Portuguese explorer Pedro Alvares Cabral reached Brazil and claimed it for Portugal. At that time, Brazil was unspoiled wilderness. Today, Brazilians face the challenge of developing the country's remarkable resources while preserving the environment for future generations.