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
Paraguay Estigarribia air base, a sprawling complex built in 1982. Paraguay consists of seventeen departments and one capital district ("distrito capital"). It is also divided into 2 regions: The "Occidental Region" or Chaco (Boquerón, Alto Paraguay and Presidente Hayes), and the "Oriental Region" (the other departments and the capital district). These are the departments, with their capitals, population, area and the number of districts: The departments are further divided into districts ("distritos"). The macroeconomy in Paraguay is characterized by a historical low inflation rate – 5% average (in 2013, the inflation rate was 3.7%), international reserves 20% of GDP and twice