With Bahia the centre of the new Portuguese colony, initial progress in Rio was slow, and only in the 1690s, when gold was discovered in the neighbouring state of Minas Gerais, did the city's fortunes look up, as it became the control and taxation centre for the gold trade. During the seventeenth century the sugar cane economy brought new wealth to Rio, but despite being a prosperous entrepA?t, the city remained poorly developed. For the most part it comprised a collection of narrow streets and alleys, cramped and dirty, bordered by habitations built from lath and mud. However, Rio's strategic importance grew as a result of the struggle with the Spanish over territories to the south (which would become Uruguay), and in 1763 the city replaced Bahia (Salvador) as Brazil's capital city. By the eighteenth century, the majority of Rio's inhabitants were African slaves. Unlike other foreign colonies, in Brazil miscegenation became the rule rather than the exception: even the Catholic Church tolerated procreation between the races, on the grounds that it supplied more souls to be saved. As a result, virtually nothing in Rio remained untouched by African customs, beliefs and behaviour - a state of affairs that clearly influences today's city, too, with its mixture of Afro-Brazilian music, spiritualist cults and cuisine.

In March 1808, having fled before the advance of Napoleon Bonaparte's forces during the Peninsular War, Dom JoA?o VI of Portugal arrived in Rio, bringing with him some 1500 nobles of the Portuguese royal court. So enamoured of Brazil was he that after Napoleon's defeat in 1815 he declined to return to Portugal and instead proclaimed "The United Kingdom of Portugal, Brazil and the Algarves, of this side and the far side of the sea, and the Guinea Coast of Africa" - the greatest colonial empire of the age, with Rio de Janeiro as its capital. During Dom JoA?o's reign the Enlightenment came to Rio, the city's streets were paved and lit, and Rio acquired a new prosperity based on coffee .

Royal patronage allowed the arts and sciences to flourish, and Rio was visited by many of the illustrious European names of the day. In their literary and artistic work they left a vivid account of contemporary Rio society - colonial, patriarchal and slave-based. Yet while conveying images of Rio's street life, fashions and natural beauty, they don't give any hint of the heat, stench and squalor of life in a tropical city of over 100,000 inhabitants, without a sewerage system. Behind the imperial gloss, Rio was still mostly a slum of dark, airless habitations, intermittently scourged by outbreaks of yellow fever, its economy completely reliant upon human slavery .

However, by the late nineteenth century, Rio had lost much of its mercantilist colonial flavour and started to develop as a modern city: trams and trains replaced sedans, the first sewerage system was inaugurated in 1864, a telegraph link was established between Rio and London, and a tunnel was excavated which opened the way to Copacabana, as people left the crowded centre and looked for new living space. Under the administration of the engineer Francisco Pereira Passos , Rio went through a period of urban reconstruction that all but destroyed the last vestiges of its colonial design. The city was torn apart by a period of frenzied building between 1900 and 1910, its monumental splendour modelled on the Paris of the Second Empire. Public buildings, grand avenues, libraries and parks were all built to embellish the city, lending it the dignity perceived as characteristic of the great capital cities of the Old World.

During the 1930s Rio enjoyed international renown, buttressed by Hollywood images and the patronage of the first-generation jet set. Rio became the nation's commercial centre, too, and a new wave of modernization swept the city, leaving little more than the Catholic churches as monuments to the past. Even the removal of the country's political administration to the new federal capital of BrasA­lia in 1960 did nothing to discourage the developers. Today, with the centre rebuilt many times since colonial days, most interest lies not in Rio's buildings and monuments but firmly in the beaches to the south of the city. For more than sixty years these have been Rio's heart and soul, providing a constant source of recreation and income for cariocas. In stark contrast, Rio's favelas , clinging precariously to the hillsides, show another side to the city, saying much about the divisions within it. Although not exclusive to the capital, these slums seem all the more harsh in Rio because of the plenty and beauty that surround them.