Paraguay
Paraguay exhibits landlocked export dependency: world's 6th-largest soy producer but 87.6% ships to Argentina; cannot export directly to China due to Taiwan recognition.
Paraguay is landlocked between agricultural giants and cannot export directly to its largest customer—a constraint that shapes its entire economy. Despite being the world's sixth-largest soybean producer (11 million tons in 2023/24, generating $4 billion), Paraguay ships 87.6% of soy exports to Argentina for reprocessing. Diplomatic recognition of Taiwan rather than China—alone among South American nations—blocks direct access to the world's biggest soybean buyer. The biological analogy is an organism that must metabolize through neighbors: Paraguay's prosperity flows through Argentina's ports and processing facilities.
The landlocked constraint compounds with river dependency. The Paraguay-Paraná waterway carries most grain exports to Atlantic ports 1,500 miles downstream, but drought in Brazil's central-west region left the Paraguay River far shallower than normal in 2024, slowing shipments precisely when global demand peaked. Total exports fell 7.6% in H1 2025, with soybean exports specifically down 15.3% as harvest shrank to 8.5-9 million metric tons from drought stress.
Diversification beyond soy has created unexpected niches: Paraguay ranks as the world's top organic sugar exporter, third-largest soybean shipper, and eighth-largest beef exporter. Hydroelectric exports from Itaipú Dam (shared with Brazil) provide stable revenue. But soybeans and beef still comprise 60-70% of merchandise exports, meaning a 15% drop in soybean prices—as occurred in early 2025—directly impacts GDP growth and fiscal revenues. Paraguay demonstrates the vulnerability of commodity specialization compounded by geographic constraints: excellence in production means little when export channels can be throttled by neighbors, rivers, or diplomatic isolation.