History of Paraguay (to 1811) Buenos Aires in 1580, the steady deterioration in the importance of Asunción contributed to growing political instability within the province. In 1617 the Río de la Plata Province was divided into two smaller provinces: Paraguay, with Asunción as its capital, and Río de la Plata, with headquarters in Buenos Aires. With this action, Asunción lost control of the Río de la Plata estuary and became dependent on Buenos Aires for maritime shipping. In 1776 the crown created the Viceroyalty of Río de la Plata; Paraguay, which had been subordinate to Lima, now became an outpost of Buenos Aires. Located at
Economy of Paraguay half, the Chaco, virgin forest is lost to cattle ranching at an annual rate of more than 200.000 hectare (2008). Sustainable wood cultivation is now on the increase. The fishing industry in Paraguay exists almost solely to meet domestic demand. Unlike many South American countries, Paraguay has few mineral resources and very little history of mining success. Foreign companies have explored Paraguay in recent years, searching for overlooked mineral deposits. Small extraction projects exist, seeking lime, clay, and the raw materials necessary to make cement, but the country's iron and steel manufacturers must import raw materials from neighboring countries. In