Asuncion

Paraguay's "Mother of Cities" earned that title literally—Buenos Aires, Santa Cruz, and Corrientes were all founded by expeditions launched from Asunción. Spanish conquistadors reached this bend in the Paraguay River in 1537 and stayed because the Guaraní people were willing to trade food and alliance. That founding bargain—European ambition married to indigenous knowledge—created a mestizo culture unlike anywhere else in the Americas. Paraguay remains the only Latin American country where an indigenous language, Guaraní, holds co-official status and is spoken by over 90% of the population.

The river made Asunción viable; isolation nearly destroyed it. The Triple Alliance War (1864-1870) killed an estimated 60-90% of Paraguay's male population when Brazil, Argentina, and Uruguay invaded simultaneously. Asunción was occupied, its treasury emptied, its territory reduced. The country that had been South America's first to build railways and telegraph lines was reset to subsistence level. Recovery took a century.

Francisco Solano López's dictatorship before the war and Alfredo Stroessner's 35-year regime after it (1954-1989) created a political pattern: centralized power in Asunción, minimal investment elsewhere. The capital holds roughly one-third of Paraguay's entire population in its metropolitan area, an extreme case of primate city concentration.

Paraguay's modern economy runs on two anomalies: the Itaipú Dam—the world's largest hydroelectric generator by energy output—provides electricity so cheap that Paraguay exports 90% of its share to Brazil, and Ciudad del Este's border trade (much of it contraband) generates enormous informal revenue. Asunción sits between these two engines without fully controlling either.

The fastest-growing economy in South America for several recent years, Paraguay's maquila sector and soybean exports funnel through Asunción's river port—the same waterway that attracted the Spanish five centuries ago.