Paraguay is located in the lowland sub-tropical interior of South America's Southern Cone. It is divided into two distinct regions by the Paraguay River. To the west of the river lies the Chaco, accounting for 60 percent of the territory but just 3 percent of the population, according to the 2002 census. Ninety-seven percent of the total population of 5.2 million lives in the rolling hills and grasslands east of the river.

Spanish conquistadors founded Asunción in 1537, establishing a colonial administration that governed Paraguay until 1811. When Buenos Aires declared its independence from Spain in 1810, it sent a military force to liberate Paraguay from the Spanish, but Paraguayan forces defeated the Argentines in battle. Paraguay declared its own independence from Spain in 1811 and then struggled for the next forty-five years to maintain its independence from Argentina. Argentina recognized Paraguayan independence only in 1856.

Paraguay has fought two major international wars: the War of...