Paraguay

It is also the only American state where an indigenous language is spoken by most of the population, and where the national identity was built on a mixture of Guaraní and Spanish that the elite has never quite known what to do with.

At a glance

How did Paraguay become independent?

By a coup in Asunción, not by a war. Paraguay was a marginal province of the viceroyalty of the Río de la Plata: poor in minerals, remote from Lima, and useful mainly as a route to the interior. When Buenos Aires deposed its viceroy in May 1810 and sent an army upriver to claim the province, Asunción refused — and on the night of 14–15 May 1811 a group of creole officers deposed the Spanish governor and declared independence.

The junta that took power in May 1811 was not a nationalist movement so much as a creole oligarchy refusing to be governed from Buenos Aires. It declared independence, then spent two years arguing about whether to accept Buenos Aires's offer of a confederation; the congress of September–October 1813 resolved the question by rejecting it and adopting a consular government, and the congress of 1814 made Francia supreme dictator for three years, a term renewed until it became permanent. Paraguay's independence was therefore settled twice: once against Spain in 1811, and once against Argentina in 1813.

The new state had no natural allies. Buenos Aires wanted it as a province, Brazil wanted its borders, and the Spanish crown wanted it back. Paraguay's answer, under José Gaspar Rodríguez de Francia, was to close the country: no foreign trade except by licence, no foreign residents without permission, no church interference, and a state that controlled the yerba mate trade, the army and the schools. Francia ruled from 1814 until his death in 1840, and Paraguay emerged from his isolation with a literate population, a state-owned economy and a deep suspicion of foreigners that outlasted him.

What did the López family build?

A modern state, and then a war it could not win. Carlos Antonio López (1840–62) opened the country cautiously, built the foundry at Ybycuí, invited foreign engineers, created a navy and an army on the European model, and sent his son Francisco Solano López to Europe to buy weapons and a mistress. When Carlos died in 1862, Francisco took power and continued the programme: railways, telegraphs, a newspaper, and the most modern army in the region relative to the country's size.

The state that the López family built was genuinely unusual for nineteenth-century Latin America: it owned the main export industries, it ran the schools, and it had no foreign debt. That independence, and the ambition that went with it, is what made Paraguay dangerous to its neighbours — and what made the war of 1864–70 so total.

Why did the War of the Triple Alliance happen?

Because a landlocked state tried to play the balance-of-power game and lost. In 1864 Brazil intervened in Uruguay's civil war, and Paraguay — which had its own claims in the Río de la Plata and a strategic interest in keeping Uruguay out of Brazilian hands — seized a Brazilian ship and invaded Mato Grosso. Argentina refused passage to the Paraguayan army, Paraguay occupied Corrientes, and on 1 May 1865 Argentina, Brazil and Uruguay signed a treaty of alliance against Paraguay.

The war that followed was the bloodiest in South American history. The Paraguayan army was destroyed at Tuyutí (1866), Humaitá fell in 1868, and Asunción was occupied on 1 January 1869; Francisco Solano López was killed at Cerro Corá on 1 March 1870. Estimates of Paraguayan deaths range from a half to two-thirds of the population — the 1870 census counted perhaps 116,000 survivors, of whom very few were adult men — and the country lost about a quarter of its territory to Argentina and Brazil in the peace settlements.

The demographic catastrophe is real; the exact proportion is not knowable, because the pre-war census was itself a guess. What is certain is that the war destroyed the state the Lópezes had built, and that the country which emerged was poor, occupied, and dominated by foreign capital for the next fifty years.

What happened after the war?

Foreign ownership, and a long argument about the land. The postwar governments sold public land to pay the debt, mostly to foreign companies and to a small group of Argentine and Brazilian buyers; the yerba mate and the quebracho trade passed into foreign hands, and the railway and the port of Asunción were foreign-owned. Paraguay became a primary exporter with no domestic industry, and its politics became a contest between the two parties that had formed around the war and its aftermath.

The Colorado and Liberal parties alternated in power, usually by election and sometimes by coup, from 1870 until 1947. The country's strategic position made it a battleground again in the 1930s, when the discovery of oil in the Chaco — or the belief in it — brought Paraguay and Bolivia to war.

What was the Chaco War?

The worst interstate war in twentieth-century South America. The Chaco Boreal, a scrubland of some 250,000 square kilometres, was claimed by both Bolivia and Paraguay; Bolivia wanted a river outlet to the Atlantic, Paraguay wanted land for its people and suspected oil. Fighting began in 1932 and ended with a Paraguayan victory in 1935, after some 65,000 Bolivian and 35,000 Paraguayan soldiers had died — most of them from thirst, disease and the absence of water rather than from bullets.

The peace treaty of 1938 gave Paraguay most of the disputed territory, and the war made the army the arbiter of Paraguayan politics. It also created the myth of the Chaco as the nation's proving ground, which the Stroessner regime would use for the next half-century.

How did Stroessner rule for thirty-five years?

Through the army, the Colorado Party and a system of patronage that outlasted him. Alfredo Stroessner, a cavalry officer of German descent, took power in May 1954 and held it until February 1989: the longest dictatorship in South America after that of Fidel Castro. He fused the army and the Colorado Party into a single machine, distributed land, jobs and smuggling licences to supporters, and used torture, exile and periodic states of siege to eliminate opposition.

His regime was also useful to its neighbours. Stroessner's Paraguay was a founding participant in the Itaipú dam project with Brazil, signed in 1973, which gave the country half of the output of one of the world's largest hydroelectric plants and tied its economy to Brazil's; it was a haven for Nazis and for other South American dictators' political prisoners, and a hub of contraband that reached from Ciudad del Este to Miami.

He fell in February 1989, when his own son-in-law, General Andrés Rodríguez, overthrew him in a coup that was as much about the succession as about democracy.

What happened after Stroessner?

A slow and uneven transition. The 1992 constitution created a democratic system with a directly elected president, and the 1993 election was the country's first free and competitive one in decades. But the Colorado Party remained in power, and the state remained a machine for distributing patronage: in 1996 a military commander, Lino Oviedo, forced a constitutional crisis; in 1999 the vice-president was assassinated and the president resigned; in 2012 a land conflict in Curuguaty led to the impeachment of Fernando Lugo, a former bishop who had won in 2008 and broken the Colorados' hold.

The country's economy has grown on soy, beef and hydroelectricity, and its politics has been shaken by the same corruption scandals as its neighbours. The 2023 election kept the Colorado Party in power, and the country's structural problems — a narrow tax base, a huge informal economy, land concentration, and the contraband trade — remain where they were.

What is Paraguay's economy?

Soy, cattle, electricity and smuggling. The eastern region, the most fertile part of the country, has been transformed since the 1970s by mechanised soy farming, largely by Brazilian settlers and agribusiness; Paraguay is now among the largest soy exporters in the world, and the crop has displaced smallholders and forest at a rate that has made the country a focus of deforestation campaigns.

Electricity from Itaipú and Yacyretá is a large part of the formal economy, and the renegotiation of the Itaipú treaty — the annex C that governs the tariff and the sale of surplus — has been a constant theme of Paraguayan politics. The informal economy, including the re-export trade through Ciudad del Este, employs a large part of the workforce and connects the country to networks that run through Brazil and Argentina.

What did the church leave behind?

Missions, land and a divided clergy. The Jesuits had built thirty reductions in the region before their expulsion in 1767, and although most lay in what is now Argentina and Brazil, the Paraguayan missions at Trinidad and Jesús left a tradition of planned settlement and of Guaraní self-government that the national story has never known what to do with. After the expulsion, the mission lands passed to the crown, then to the state, then to private owners.

The church itself was poor and divided. Francia had subjected it to the state and confiscated much of its property; the Franciscans and the secular clergy supplied the parishes, and the 1840s saw the creation of a national seminary. In the twentieth century the church produced both the regime's chaplains and, in the 1970s and 1980s, the human rights activists who documented torture and disappearances — a division that culminated in the election of Bishop Fernando Lugo as president in 2008.

How did the Colorado Party become the state?

Through the civil war of 1947 and the patronage that followed. The Colorado Party, founded in 1887, was one of the two oligarchic parties of the postwar period; it was out of power in 1946 when a coalition of Liberals, Febreristas and Communists took office, and in 1947 it fought and won a brief civil war that drove its opponents into exile. From then on the party and the state were hard to distinguish: the army, the police, the customs houses and the municipalities were staffed by Colorados, and the party's factions competed for the spoils.

Stroessner perfected the machine. He rotated officers to prevent rivals from building a base, distributed land and import licences to loyalists, and made membership of the party a condition of public employment. When he fell in 1989, the party survived him — it has governed for all but five of the years since — because the machine he built was the state's administration as much as a political organisation.

What happened to the land?

It became concentrated to a degree unusual even in Latin America. After the war the state sold public land to pay its debts, and the laws of 1883 and 1885 allowed the sale of the remaining fiscal lands in enormous blocks; by the early twentieth century a few hundred families and foreign companies owned most of the country. The 1963 agrarian statute promised reform, but Stroessner's government used it to distribute land to Colorados and military officers instead, and the frontier in the east was opened to Brazilian soy farmers from the 1970s.

The result is the country's most explosive social question. Some two per cent of landowners hold most of the farmland, while hundreds of thousands of smallholders and landless families occupy and re-occupy estates; the 2012 Curuguaty massacre, in which eleven peasants and six police officers died during an eviction, led directly to President Lugo's impeachment. Land occupations remain the most common form of rural protest.

What is the Guaraní question?

Whether Paraguay is a bilingual nation or a Spanish-speaking state with a Guaraní majority. Guaraní is spoken by most of the population, including many who do not speak Spanish well, and it carries a social stigma that dates from the colonial association of the language with the unconquered interior; for most of the twentieth century it was banned from schools and from official use.

The 1992 constitution made both languages official and required bilingual education, and Guaraní has since become a marker of national identity — used in political campaigns, in football commentary and in literature. But the diglossia persists: Spanish remains the language of courts, universities and business, and the schools that teach in Guaraní are fewer than the constitution promises. The country's identity is mestizo and Guaraní-speaking in its self-description, and Spanish-speaking in its institutions.

How does Paraguay sit in the region?

As a small state that uses its position between Brazil and Argentina. It is a founding member of Mercosur, and its economy is tied to Brazil's: the border at Ciudad del Este is one of the largest trading zones in South America, and Itaipú makes the relationship structural. With Argentina the shared Yacyretá dam and the Paraná waterway have the same effect.

Its foreign policy has one persistent oddity: Paraguay was for decades the only South American state to recognise Taiwan rather than Beijing, a relationship that survived until 2023, when the new Colorado government recognised the People's Republic. The switch was contested domestically and closely watched in Taipei, and it reflects the country's habit of turning diplomatic recognition into an economic bargaining chip — a habit that dates back to Francia.

How did the war change Paraguayan society?

It inverted the population and destroyed the elite. Before 1864 Paraguay had perhaps 300,000 people, a small creole upper class, a large mestizo peasantry and a state that owned most of the export economy. After 1870 it had fewer than half that number, a generation of women who could not marry, and a state that had lost its foundry, its navy, its archives and its territory.

The land settlement that followed shaped everything. The postwar governments created the tierras fiscales — public lands — and sold them to raise revenue, in blocks measured in square leagues; the buyers were Argentine and Brazilian merchants, foreign companies and a handful of Paraguayan families. By 1900 the country had a landless peasantry and a landed elite that had not existed in the same form before the war, and the Colorado and Liberal parties organised that elite's politics.

The war also became the founding myth of the modern nation. The kamba — the Paraguayan soldier, Guaraní-speaking, barefoot, loyal — was celebrated in literature and in the army's own history, and the defeat was told as a story of heroic sacrifice rather than of political folly. That version of the war, taught in schools and repeated in the Chaco, made the army the guardian of the nation and gave every later dictatorship a language of patriotism to borrow.

What was the Liberal period like?

Thirty-five years of oligarchic politics and foreign debt. The Liberals governed from 1904, when a revolt ended Colorado rule, until 1940, when a coup installed a military government; their period saw the country's first real export boom in quebracho and yerba mate, the construction of the railway to Encarnación, and the founding of the country's universities and newspapers.

The Liberals were also unlucky in their timing. Their period coincided with the great expansion of the Argentine and Brazilian economies, which drew Paraguayan labour north and east and made the country's own small market less viable; it coincided too with the Chaco dispute, which no Paraguayan government could settle without appearing to surrender national territory. When the war came in 1932, the Liberal state had neither the army nor the revenue to fight it, and the officer corps that won it never forgave the politicians who had sent it into the field unprepared.

It also saw the country's dependence deepen. Foreign companies owned the ports, the tanneries and the railways; the state's revenue came from customs duties on trade it did not control; and the Chaco dispute with Bolivia was allowed to drift until it became a war. The Liberal governments were not worse than their neighbours, but they were weaker, and the war exposed it.

What did the Chaco War do to the army and the state?

It made the army the country's central institution. The war was won by a smaller, poorer country against a larger one, in terrain that killed more men than the fighting did; the victory gave the officer corps a prestige it had not had since 1870, and it gave the state a new national story in which the soldier, not the lawyer, was the true Paraguayan.

The war also created the conditions for the 1936 February revolution, when war veterans and nationalist officers overthrew the Liberals, and for the 1940 constitution that gave the state a corporatist cast. When the civil war came in 1947, the army that had won the Chaco was the prize both sides were fighting for, and when Stroessner took power in 1954 he inherited an institution that already saw itself as the nation's guardian.

How did the economy work under Stroessner?

Through construction, contraband and foreign capital. The regime's economic model rested on three pillars: public works financed by foreign loans — most famously Itaipú, signed with Brazil in 1973 — the re-export trade through Ciudad del Este, and the expansion of cattle and, later, soy into the eastern forests. Growth was respectable in the 1970s and negative in the 1980s, when the debt crisis hit and the regime's patronage became unsustainable.

The costs were borne by the countryside and by the poor. Land was distributed to officers and party loyalists, peasants were pushed onto smaller plots or into the cities, and the state's spending on health and education was among the lowest in the region. The economy that emerged from the dictatorship was modern in its export sector and archaic in its labour relations — a combination that has survived the transition.

What is Paraguay's politics now?

A dominant-party system with a competitive façade. The Colorado Party has won every election since 2003, and its internal factions — movimientos — function as parties within the party, negotiating positions and patronage rather than programmes. The opposition is fragmented, the electoral system favours the largest party, and the courts and the press have been repeatedly captured by whichever faction holds the presidency.

The issues that dominate are land, corruption, the Itaipú renegotiation, and organised crime. The border with Brazil is a corridor for drugs, arms and money laundering; the assassination of a prosecutor in 2022 and the killing of a young prosecutor in 2025 brought international attention to the penetration of the state by criminal networks. The country's democratic institutions are formally intact and substantively weak, which is the pattern the region knows well.

What happened in the transition of 1989?

A coup from inside the regime, then a constitution written in a hurry. On the night of 2–3 February 1989 General Andrés Rodríguez, Stroessner's son-in-law and the commander of the cavalry, surrounded the presidential guard and arrested him; the fighting in Asunción killed perhaps a hundred people, and Rodríguez promised elections within months. He won them in May 1989 as the Colorado candidate, which told the opposition what kind of transition it would be.

The 1992 constitution, drafted by a constituent assembly, was nonetheless a genuine break: it abolished the death penalty, created a defender of the people, established a constitutional chamber, recognised Guaraní, and — crucially — ended the ban on presidential re-election that had allowed Stroessner to rule for life. It also kept a strong presidency, an electoral system that favours large parties, and a judiciary appointed through the senate, which is why the transition produced a democratic form with a patrimonial content.

The first real alternation came in 2008, when Fernando Lugo, a former bishop backed by a coalition of the left and of dissident Colorados, won the presidency and ended sixty-one years of Colorado rule. It lasted four years, ended by an impeachment that his supporters called a coup, and the Colorados have held the presidency ever since.

What is the Triple Frontier problem?

The place where three states and a great deal of money meet. The Triple Frontier, where Paraguay, Brazil and Argentina meet at the confluence of the Paraná and Iguaçu rivers, is one of the busiest trading zones in South America and has been for decades a route for contraband, arms and narcotics; after 11 September 2001 it was also investigated as a possible source of terrorist financing, allegations that were never substantiated and that did lasting damage to the region's reputation.

For Paraguay the stakes are structural. Ciudad del Este exists because of the arbitrage between Brazilian taxes and Paraguayan tariffs, and any tightening of controls hurts a city of 300,000 people. The state's capacity to police the border is limited, the customs service has been a source of patronage, and the result is a country whose sovereignty is real and whose control of its own border is not.

How does Paraguay remember the war?

Through a literature of defeat and a school curriculum of heroism. The War of the Triple Alliance produced no Paraguayan equivalent of Tolstoy: the country's own voice was largely silenced by the occupation, and the memory was shaped afterwards by politicians who needed the sacrifice to justify the nation. The kamba myth, the cult of Cerro Corá, and the story of López's last stand became the materials of a national identity built on endurance rather than victory.

Historians have been rewriting that story since the 1980s. Whigham, Warren and Cooney showed how many of the war's legends were postwar inventions, and the demographic question — how many died, and whether the "90 per cent of men" figure is anything more than rhetoric — remains contested because the evidence cannot settle it. What is not contested is the result: a country whose politics, land tenure and army were all shaped by a war it lost a hundred and fifty years ago, and which still teaches its children that the sacrifice was noble.

What does the country look like today?

A young, urbanising, bilingual society with an unusually high birth rate for the region. Paraguay's population grew from about 2.5 million in 1970 to nearly seven million today, and although Asunción and Ciudad del Este dominate, most Paraguayans still live in towns of a few thousand people. The country has one of the region's youngest populations and one of its least regulated labour markets: roughly two-thirds of workers are informal, and the pension system covers a minority of them.

That profile explains both its politics and its economy. A young workforce and abundant land and electricity ought to be an advantage, and in the soy and cattle sectors they are; but the state's revenue is low, its schools are weak, and the informal economy makes it hard to raise either wages or taxes. The country's future depends less on its resources than on whether its institutions can ever tax, educate and police a population that has grown used to the state's absence.

What is at stake in the Itaipú renegotiation?

Money, and sovereignty over a river. The 1973 treaty's annex C, which set the tariff for the electricity Paraguay sells to Brazil and the terms on which it can sell its surplus, expires in 2023 — the negotiation over its replacement has been the central foreign-policy question of the last decade. Paraguay consumes a small fraction of its half of the output and sells the rest to Brazil, and it argues that the price should reflect the market rather than the historic cost.

Brazil has been willing to pay more but not to reopen the treaty's fundamentals, and the negotiation has been complicated by domestic politics on both sides. For Paraguay the issue is symbolic as much as financial: the dam is the largest thing the state owns, and the question of who benefits from it is a question about whether the country's resources belong to its people or to its neighbours.

Common myths about Paraguay

Timeline of Paraguay

What the map shows next

At 1951 on the map Stroessner's Paraguay is a landlocked economy tied to Brazil, and Bolivia still has no coast.

At 2024 on the map the Colorado Party is still in power, and the Brazilian border is the axis of the country's trade.