Paraguay, heart of South America

Paraguay is structured by a very marked geographic divide. In the east, the Paraneña region concentrates most of the population, agricultural lands, gentle hills and abundant rainfall (1,200 to 1,800 mm/year). Its red soils, of basaltic origin, sustain most of the national agriculture, while the relief culminates at Cerro Perõ (842 m), the highest point in the country.

In the west, the Chaco occupies 60% of the territory for barely 2% of the population. An almost perfectly flat sedimentary plain covering 246,000 km², it gives the country an impression of nearly infinite space. The Paraguay River (2,695 km) acts as a structuring axis, while the Paraná sustains the Itaipú dam (14 GW), the second largest hydroelectric dam in the world by annual production, built binationally with Brazil. Downstream, Yacyretá (3.1 GW), co-managed with Argentina, completes the setup.

Water shapes Paraguay more than any mountain or sea. The dams are not a technological parenthesis: they became the second pillar of the national economy. The country sells its electricity to its neighbors at preferential rates, turning its rivers into a strategic income.

The Paraná River (4,880 km), the second longest in South America after the Amazon, forms the eastern and southern border of the country for nearly 700 km. It sustains the two largest dams in Paraguay: Itaipú (14 GW, inaugurated in 1984, binational with Brazil) and Yacyretá (3.1 GW, commissioned between 1994 and 1998, binational with Argentina). The Paraná has an average flow of 17,290 m³/s at its confluence with the Paraguay. The Paraguay River (2,695 km), for its part, is slower (a drop of 127 m over 2,300 km in Paraguayan territory), navigable along almost its entire Paraguayan course and sets the rhythm of the humid Chaco. These two waterways define the borders and the economy of the country more decisively than any mountain range.

The Chaco deserves a more precise description. It covers 246,000 km², 60% of the national territory, but is home to less than 200,000 inhabitants. It is a quaternary sedimentary plain, shaped by the fluvial erosion of the Pilcomayo and Bermejo rivers. The eastern half of the Chaco (humid Chaco) receives between 800 and 1,200 mm of rain per year and supports a dense forest of red quebracho, palo santo and labón. The western half (dry Chaco) receives less than 500 mm/year: wooded savanna, cacti, saline soils. The most emblematic species is the quebracho, a tree with wood so hard it "breaks the axe" (quiebra-hacha), exploited for its tannin since the 19th century. The Chaco is also the habitat of the jaguar, the puma, the giant armadillo and the rhea. The Transchaco (route 9), 830 km from Asunción to the Bolivian border, is the only paved axis crossing this space.

The Paraguayan economy rests on three pillars: agribusiness, hydroelectricity and border trade. Soybeans are the top export product (about 10 billion dollars per year), followed by beef, corn and rice. Paraguay is the 4th largest soybean exporter and the 6th largest beef exporter in the world. Surprising figures for a country of 6 million inhabitants.

Nominal GDP reached 44.2 billion dollars in 2023 (IMF), with a GDP per capita of 7,200 USD (PPP). Inflation is historically moderate for the region (around 4-6%). The main trading partners are Brazil, Argentina and China. Ciudad del Este embodies the second face of the country: that of resale trade, purchasing flows and the circulation economy. The result is more complex than it seems, with strong inequalities between the Paraneña and the Chaco.

Two aspects of the Paraguayan economy deserve special mention. The first is the informal economy. According to the International Labour Organization (ILO), informal employment represents about 65% of non-agricultural employment in Paraguay. Street markets, street vendors, cross-border resale, small family workshops: all of this constitutes a considerable part of daily economic life. For the traveler, this means that much of what you buy (handicrafts, food, local transport) goes through undeclared circuits. The second is Law 60/90, known as the maquila law: a very favorable tax regime that allows foreign companies (especially Brazilian and Asian) to produce in Paraguay for re-export, benefiting from almost total tax exemption. Maquilas employ about 30,000 people, mainly in textiles, automotive assembly and electronic parts. Ciudad del Este and Hernandarias concentrate the majority.

In Greater Asunción, an entrepreneurial scene has emerged since the 2010s: tech startups (fintech, agritech), incubators such as the Universidad Nacional Business Incubator, and a connected urban middle class. Paraguay also attracts Chinese investors, especially in infrastructure (the bioceanic corridor project connecting the Chilean port of Antofagasta with the Brazilian port of Santos through the Paraguayan Chaco). This contrast between high-tech export agriculture of soybeans, low-cost maquilas, massive informality and the emergence of a modest tech scene gives the Paraguayan economy a very composite picture.

Paraguay is mainly reached by plane through Silvio Pettirossi International Airport in Asunción (ASU, 16 km from the center) and Guaraní International Airport in Ciudad del Este (AGT). Direct flights from Europe are limited: Air Europa connects Asunción from Madrid (3 flights per week). Regional airlines (LATAM, Paranair, JetSmart, Azul) connect Asunción with Buenos Aires, São Paulo, Santiago and Lima.

The country maintains a fairly simple access logic for the independent traveler, though less "ultra-connected" than some more touristic neighbors. That is part of its charm: you still travel with some method and anticipation. Long-distance buses connect all cities at ridiculously low prices, a bargain for tight budgets.

Paraguay is generally a safe country for travelers, with a lower rate of violent crime than its Brazilian and Argentine neighbors. Basic precautions are enough: avoid displaying valuables on public transport, do not walk alone at night in remote neighborhoods, lock doors at traffic lights. Pickpockets are active in markets (Mercado 4) and bus terminals.

Healthcare quality varies: private hospitals in Asunción (Hospital Sirio-Libanés, Hospital San Roque) are of good standard, but public hospitals are poorly equipped outside major cities. There are no mandatory vaccines, but hepatitis A, typhoid fever and tetanus are recommended. Travel insurance with repatriation is essential.

Paraguay is divided into 17 departments plus the capital Asunción, which forms an autonomous district. The division dates from 1992 (Constitution, art. 156-160) but was stabilized by law 351 of 1993. East of the Paraguay River, 14 departments concentrate almost all the population and economic activity, from Concepción in the north to Itapúa and Misiones in the south. To the west, 3 departments occupy the vastness of the Chaco: Presidente Hayes, Boquerón and Alto Paraguay.

Each department has a governor elected for 5 years and a departmental board (equivalent to a general council). The budget and competencies are limited: departments mainly manage secondary roads, schools and rural health centers. Power remains highly concentrated at the national level. The departmental map has changed little since the 1990s, but the demographic weight of Greater Asunción (Central + capital) keeps increasing: 36% of the population on less than 1% of the territory.