A landlocked country in south-central South America, bordered by Bolivia and Brazil on the north and Argentina on the south.
The navigable Paraguay River, running down the middle of the country, joins the Paraná and provides access to the sea. In the west the Gran Chaco provides rich pasture and hardwood forests. In the east, the land rises to a low range of forested hills, to the south of which there are swamps and palm-fringed, shallow lakes.
Paraguay has a primarily agricultural economy, with cotton and soya beans the principal exports, and subsistence crops of cassava and maize. The construction of the Itaipú dam (1985), the world's largest hydroelectric project, benefited the economy, but high inflation and debt remain a problem. Industry is restricted to textiles, food-processing, and cement.
Paraguay was part of Spain's Rio de la Plata territory from the founding of the capital Asunción in 1537. It was only sparsely settled by Spaniards and was dominated by Jesuit mission villages among the Guaraní Indians until their suppression in 1767. The country achieved its independence (1811) when local Paraguayan military leaders led a bloodless revolt against the Spanish governor. The dictator José Gaspar Rodriguez de Francia ruled the new republic from 1813 to 1840, but the rest of the 19th century was dominated by corruption, coups, and chronic bankruptcy. Francisco Solano López led the country to disaster in the Paraguayan War (1864–70). Political turmoil continued into the 20th century with the exception of the presidency of the liberal Edvard Schaerer (1912–17), which was marked by foreign investment and economic improvements. In the Chaco War (1932–35), Paraguay won from Bolivia the long-contested territory believed to have oil reserves. In 1954 General Alfredo Stroessner, supported by the USA, seized power. A massive hydroelectric scheme (the Itaipú dam) was begun and some progress made in settling landless peasants; but cattle exports to Europe fell, the economy declined, and the regime became increasingly brutal. Stroessner lost US support and was deposed in 1989. Elections brought General Andrés Rodríguez to office as President. A liberal party, Asunción Para Todos (APTO), emerged but, with military backing, Rodríguez and his Colorado Party retained power. Paraguay's first multiparty elections were held in 1993, with the civilian Juan Carlos Wasmosy being elected President. In 1998 Raul Cubas Gran was elected President; however, following the pardon and release of his ally General Lino Oviedo – imprisoned for leading an attempted coup in 1996 – parliament began impeachment proceedings the following year. Cubas's supporters assassinated his main rival, Vice President Luis Maria Argana in March 1999. Street violence began and Cubas fled the country to avoid arrest. Gonzalez Macchi assumed the presidency for the rest of his term and was succeeded by Nícanor Duarte after elections in 2003.
Source: MAPS IN MINUTES™ © RH Publications (1997)
406,752 sq km (157,048 sq miles)
1 guaraní = 100 céntimos
Roman Catholic 89.6%; Protestant 6.2%
Mestizo 85.6%; White 9.3%; Amerindian 1.8%