Sao Paulo is the largest state in Brazil in terms of its economic force and therefore worthy of attention from an investment perspective. The state has the largest population, industrial and economic hub in the country. As well as being then wealthiest state in Brazil, it’s capital is the largest in South America.

Prior to European settlement in the 16th century, the region was largely populated by the Tupi’s peoples nation. It was during this time that widescale slavery of the indigenous communities was common and explorers, known as bandeirantes, would tour the entire country searching for natural riches such as silver, gold and diamonds. By 1600, little economic activity took place apart from small scale agriculture (with most of the country’s industry taking place in the sugar plantations of the north east). It was not until 1807, when Napoleon invaded Portugal, that Brazil became the country’s temporary headquarter. King Joao VI rewarded his hosts by opening ports and lifting several economic restrictions. By 1888, slavery had become outlawed and Spanish, Portuguese and Italian foreigners were offered incentives to work on the farms throughout the state and from 1908, the Japanese began to arrive in abundance.

Whilst rubber, sugar and cotton played important roles in the rise of the state’s economy – it was coffee that made up the majority of the state’s exports at the beginning of the twentieth century. However, the uncertain seasons, vulnerable poor harvests, over-reliance on credit and increasing competition from other states and South American countries led to an over-saturation and a vast scaling down of the industry. The states industrial sector began to focus more towards agriculture – mainly in the form of cotton production (which eventually gave birth to textile manufacturing) and food processing. However, the effects of the World Wars had their effect on Brazil leading to widespread unemployment and increasing class divides. The Paulista Revolutionary Party, led by left-leaning intellectuals, began to claim more political influence and called for more control of the city. The Paulista War was a major uprising by the movement against the federal government of Getulio Vargas – and was started after five protesting students were killed by government troops on May 23, 1932. On the wake of their deaths, a movement called MMDC (from the initials of the names of each of the four students killed, Martins, Miragaia, Drausio and Camargo) started with huge street wars and clashes following – the revolt was militarily crushed on October 2, of the same year. The battles were not in vain as some of the movements demands were granted, namely: the appointment of a non-military state Governor, the election of a Constituent Assembly as well the enactment of a new Constitution in 1934 (although this was re-amended out of a growing governmental concern of a political spectrum appearing).

Vargas’s turbulent political career culminated in suicide and he was replaced by Juscelino Kubitschek who focused on building factories, steel plants, hydropower infrastructure and roads (Petrobras, Brazil’s oil monolith, was set up in 1953). It was due to these policies that by the 1960s, Sao Paulo state controlled over 55% of Brazil’s industrial production (an increase from 17% in 1907) and it was during this time that the city rose to be the third largest in the world (after Tokyo and Mexico City).

The military governance of Brazil from the mid to late 1980s prompted extremely high inflation levels which affected the state negatively (economically, politically and socially). It was during this time that crime began to increase significantly – largely due to intensified social inequality prompted by widespread unemployment. Large amounts of Paulistas began leaving the country to continents such as North America, Europe, Australia and East Asia. The repatriation of Brazilians occurred throughout the 1990s when the economy began the road to recovery (due to strictly orthodox government intervention which went on to serve the country well during the onset of the global financial crisis).

Today, the state offers some of the most exciting opportunities and it is widely predicted to continue to do so – largely due to solid economic and political governance as well as the increasing role that Brazil is having on a global scale. Sao Paulo state is responsible for approximately half of Brazilian GDP making it significantly important in the future development of the country. The service sector is the largest component of gross domestic product; followed by the industrial sector. The agriculture sector is also an important industry representing 8.5% of GDP in 2009. The richest municipalities are mainly located around Greater Sao Paulo – including Indaiatuba, Campinas, Paulínia, Jundiai, Americana, Sao Jose dos Campos and Santos – but there are also wealthy municipalities located some distance from the city including Sao Carlos, Ribeirao Preto, Jau and Sao Jose do Rio Preto.