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 River the river's banks sometimes forces many thousands of displaced residents to seek temporary shelter until the waters recede from their homes. The Paraguayan military has been forced to dedicate land on one of its reserves in the capital to emergency housing for these displaced citizens. The river is a tourist attraction for its beauty. The Paraguay River is the primary waterway of the Pantanal wetlands of southern Brazil, northern Paraguay and parts of Bolivia. The Pantanal is the world's largest tropical wetland and is largely dependent upon waters provided by the Paraguay River. Owing to its importance as a navigable