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
Pedro Juan Caballero, Paraguay Pedro Juan Caballero, Paraguay Pedro Juan Caballero () is a Paraguayan city located in the Amambay Department of which it is the capital. The city lies on the border with the Brazilian city of Ponta Porã in the state of Mato Grosso do Sul and is known as a centre for cheap electronic and consumer goods, and also as a centre for drug smuggling. This city is the highest city in Paraguay at 670 m (2201 ft) above sea level and is named after Pedro Juan Caballero. Pedro Juan Caballero counts with the Dr. Augusto Roberto Fuster International Airport and