The Portuguese who settled in Recife, around 1534, were the initial ones to rule Recife. To begin with, financially, the Portuguese were in a very bad state. To reduce the uncertainty of their settlements and be assured of their possession of the port, the Portuguese rulers divided the port into strips, which they called captaincies. They handed these strips over to the Portuguese businessmen who would have to develop their colonies with their own finances on behalf of the rulers.
Most captaincies failed, with the exclusion of the Captaincy of Pernambuco, which was ruled by Duarte Coelho Pereira. He founded the villages of Olinda and Igaracu near Recife.
The village of Pernambuco flourished under the rule of Duarte Coelho Pereira, because of its sugarcane industry.
Sugar, exported from Brazil was a very valued food product in Europe, as Beet sugar was not then produced. During the 16th century, Recife was just a small village from where supplies were exported to different regions and countries.
Initially Duarte Coelho Pereira tried to steer the native people in the cultivation of the cane industry, but he realized that they could not adapt to the work. So he was left with no option but that of importing slaves from Africa, India and later from Netherlands. So today you can see a lot of mixture of African-Indian-Brazilian-Dutch customs in Recife. That makes it the most culturally varied city in Brazil.
To begin with the Portuguese and the Dutch had good relations. But later in the 15th century when Spain invaded Portugal, they prohibited the Dutch from entering Brazil, as they were the main distributors of sugar in Europe. The Dutch attacked many sugar-producing cities in Brazil, one of them being Recife.
During this period, Recife was a very cosmopolitan city. Mauricio de Nassau was one of the famous Dutch governors to rule Recife in 1637. He laid the foundation of the infrastructure of Recife. He built bridges and streets with the help of many intelligent architects and bought artists from Holland. He modernized and contemporized the city. The first Jewish community and their synagogue were founded in Recife, during the Dutch rule. During their rule, the Dutch had to fight the Brazilians, Africans, Indians, and the Portuguese. Two battles were fought near the hills of Guararapes, which resulted in the victory of Pernambucanos. In 1654 the Dutch surrendered and left Brazil.
After the Dutch left, the natives expelled the Jews who then immigrated to the United States and Amsterdam.
Riots spread in Recife during the 18th century, wherein farmers of Olinda and traders of Recife fought in the War of Mascates. Recife obviously won as it was a larger city and a port.
During the 19th century, Recife became a major commercial centre where people from other states came to sell their goods. Cotton was the foremost item to be exported.
When the Brazilian government formed SUDENE in the 1950s, Recife industrial sector got a new boost with advancements in textile, chemical, food and drink, minerals processing divisions.
In recent decades, the State of Pernambuco has maintained its position of leader in the Northeastern region of Brazil. Today Recife is a major industrial and commercial city, while Olinda is a small historical town. In present times, Recife is known for its colonial buildings, which have their roots in different colonization’s.
The surrounding town of Olinda was declared World Heritage by UNESCO in 1982, which lead to an increase in tourism in the state.