Pre-Columbian Paraguay was a rich tribal patchwork with mostly Guaraní settled in the south and a band of hunter-gatherers known as Aché inhabiting the subtropical areas that now border Brazil. The Chaco contained a diverse variety of people, known as Abipones, Tobas, Matacas, and Mbayás. Predominately peaceful people, they nevertheless often fought amongst themselves and resisted strongly any Spanish incursions. Indian hostility to foreign settlements continued into the 20th century.

Alejo Garcia was the first European to enter the area in 1524 from the Brazilian side. His discovery of silver in the Andes led to the naming of Río de la Plata (Silver River). Pedro Mendoza, fleeing Indian persecution in Buenos Aires, founded the first settlement at Asunción in 1527. He formed an alliance with the Guaraní and the 350 Spanish men assimilated into Guaraní culture, though eventually the Europeans became the dominant political and economic force.

The arrival of the Jesuits in the late 16th century led to huge social changes, the remains of which can be seen today. The Jesuits had less success in the north where the non-Guaraní tribes resisted strongly and launched raids on the settlements. The Jesuits were eventually expelled by the Spanish in 1767 and the crown lost interest in the Chaco when they realized it held neither gold nor silver or a transit route to Bolivia.

In fact, the Spanish lost interest in the area completely and offered little resistance when independence was declared in 1811. Paraguay's first dictator thus emerged and Dr. José Gaspar Rodríguez de Francia ruled the country with an iron fist and a touch of paranoia from 1814 to 1840. Such was his unpopularity that 30 years after his death, his enemies dug up his remains and threw them into the Río Paraguay.

Carlos Antonio López then led the country for 20 years and ushered in a period of development, prosperity, and military might. This was all squandered by his son Francisco Solano López and his Irish mistress Eliza Lynch when they took power in 1862 and led the country into a disastrous war with Brazil, Argentina, and Uruguay that became known as the War of the Triple Alliance. The result was a catastrophe for Paraguay, with a paranoid and bloodthirsty Solano López meeting his end in the northern jungle and the country decimated; half its population was lost to war, famine, and disease and 150,000 sq. km (58,500 sq. miles) of territory was lost forever.

A period of tumultuous politics followed with the opposing Colorado and Liberal parties engaging in a disordered tug of war for power right up to modern times. The economy slowly recovered with European and Argentine immigration. Agricultural achievements were revived, sovereignty reestablished, and important reforms made.

Then the Chaco War erupted in 1932 -- a bloody squabble with Bolivia over the piece of northern territory that many thought may hold oil -- including Standard Oil and Shell Oil, who were both accused of funding the opposing sides in return for exploration rights. In the end it proved a futile exercise and the area remains populated by isolated Indian tribes and self-sufficient Mennonite communities.

Colorado and Liberal rivalry continued, often taking on the characteristics of a full-scale civil war. Then a military coup in 1954 ushered in the 35-year-long, brutal, corrupt, and repressive dictatorship of General Alfredo Stroessner. It was not until another coup by General Andrés Rodríguez in 1989 and elections in 1991 that Paraguayans could eventually claim to have a "normal," fully fledged democracy.

Juan Carlos Wasmosy became Paraguay's first elected civilian president in 1993. The military menace remained, however, in the shape of General Lino Oviedo. His threat of a coup landed him in jail, but he gained immediate release when his political ally Raúl Cubas won the 1998 election. The pardon caused public disgust followed by outrage at the assassination of critic and Vice President Luis María Argaña in 1999. Cubas and Oviedo eventually joined Stroessner in exile in Brazil and Luis Angel González Macchi assumed power. His initial popularity was soon tarnished with allegations of corruption, not helped by the fact that he drove a stolen BMW.

Paraguay Today -- Economic mismanagement, inefficiency, and rampant corruption still dog Paraguayan politics. The Colorado party remains the dominant political force, but it finally relinquished 61 years of the presidency with the election in 2008 of an ex-bishop known as Fernando Lugo. The leader of a loose coalition known as the Patriotic Alliance for Change, Lugo is a political newcomer with very little power base and many challenges facing him. Promising to fight poverty, inequality, and corruption, Lugo's own integrity was called into question in 2009 when it was revealed that he had fathered three children with three different women while still a bishop. Lugo survived the scandal, but it remains to be seen whether he can bring badly needed change to Paraguay, especially in the area of land reform.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.