Paraguay, one of South America's least densely populated countries, experienced more than three decades of dictatorship under Alfredo Stroessner, who was ousted in 1989 and died in exile in 2006.
The end of his iron-fisted rule did not bring political stability. Factional splits led to the assassination of a vice-president, the resignation of a president and an attempted coup.
Stroessner's party, the National Republican Association-Colorado Party, survived his departure and remained in power until 2008. In elections in April it was defeated by the centre-left Patriotic Alliance for Change led by Fernando Lugo.
Up to 95% of Paraguayans are mestizos, people of mixed Spanish and native American descent. Many speak the language of the indigenous Guarani; the rest are bilingual or only speak Spanish. There is a Japanese community, a legacy of post World War II migration.
With few mineral resources, Paraguay's economy revolves around agriculture. The 1990s saw slow, steady growth, but by 2002 the economy was in serious trouble, partly because of a financial crisis in neighbouring Argentina. Emergency loans - conditional on economic reforms - were negotiated with the IMF.
Corruption is widespread and Paraguay is a centre for smuggling, money laundering and organised crime.
The triple border region, where Paraguay touches both Argentina and Brazil, has long been associated with drug-smuggling and other contraband trade.
It is also home to a large Middle Eastern community, and the United States has identified it as a source of funding for Islamic militant groups - though Argentina, Brazil and Paraguay reject that allegation.
The commercialisation of agriculture, population growth and forest clearances have led to a dramatic increase in the number of landless families.
This has boosted migration into urban areas and shanty towns have burgeoned. Around 60% of Paraguayans live in poverty.
Much of the north-west is taken up by the Chaco, a vast and largely uninhabited plain. Paraguay and Bolivia fought over it in the 1930s; the war left 100,000 dead.
- Full name: Republic of Paraguay
- Population: 6.6 million (UN, 2011)
- Capital: Asuncion
- Area: 406,752 sq km (157,048 sq miles)
- Major languages: Spanish, Guarani
- Major religion: Christianity
- Life expectancy: 71 years (men), 75 years (women) (UN)
- Monetary unit: 1 guarani = 100 centimos
- Main exports: Soyabeans, cotton, meat, edible oils, timber
- GNI per capita: US $2,970 (World Bank, 2011)
- Internet domain: .py
- International dialling code: +595
President: Federico Franco
President Federico Franco will serve until 2013
Vice-President Federico Franco assumed the presidency in June 2012, when Congress controversially impeached left-wing President Fernando Lugo over his handling of a land eviction that left 17 people dead.
Mr Lugo complained that the impeachment had failed to give him enough time to present his case, and was tantamount to a coup.
Regional leaders criticised the move, with Argentina, Brazil and Ecuador refusing to recognize Mr Franco as president. The South American Mercosur trading bloc suspended Paraguay until next year's presidential election, but stopped short of imposing sanctions, suggesting that its members have accepted that Mr Franco is unlikely to step down.
Mr Franco, a leading member of Paraguay's main opposition Authentic Radical Liberal Party, had agreed to run as Mr Lugo's vice-president in 2008 in order to help end 61 decades of rule by the conservative Colorado Party.
Vice-President Franco soon fell out with Mr Lugo over a number of policy matters, most notably land reform. He accused the president of not respecting the law in his drive to push through measures to give land to poorer farmers.
Born in 1962 and a surgeon by profession, Mr Franco entered politics and became governor of the important Central Department in 2003 before joining Mr Lugo's presidential bid in 2008.
He is expected to serve out the rest of Mr Lugo's term in office, which ends in August 2013.
Fernando Lugo had stepped down as Roman Catholic bishop in 2006 to enter politics on a manifesto of tackling inequality and corruption.
On taking office in August 2008, he vowed to deliver on land reform - a key issue in a predominantly agrarian economy.
But his party, the Patriotic Alliance for Change (APC) and its allies were unable to overcome opposition from the Colorado Party, which remained powerful in Congress.
His presidency was overshadowed by paternity scandals and a cancer diagnosis.
Newspapers and broadcasters air a range of views, including those of the opposition. But journalists investigating corruption, or covering strikes and protests, risk intimidation and media outlets sometimes face legal harassment.
Reporters Without Borders (RSF), the media rights body, said in 2007 that journalists "do not dare probe too deeply into scandals involving politicians".
Unlicensed radio stations have flourished in the tri-border area, where the frontiers of Paraguay, Brazil and Argentina meet.
There were 1.1 million internet users by March 2011 (Internetworldstats.com).