Paraguay, officially the Republic of Paraguay (República del Paraguay; Teta Paraguay), is a country in the heart of South America, bordered to the north and west by Bolivia, the northeast and east by Brazil and south and west by Argentina. Its capital is the city of Asuncion. Paraguay is one of the two South American countries that do not have an outlet to the sea, the second being to Bolivia. Being a smaller country, its area corresponds to the Brazilian state of Mato Grosso, surpassing the size in Ecuador. The name of the country is derived from the word Guarani Paraguay, which means "a great river." The "great river" is the Paraguay River, which divides the country into two regions, Eastern Region and Western Region (or Chaco).
Located in the central-southern South America, Paraguay has long flat area in the east, where soy is grown, the main product of export. The region of the Gran Chaco savannah in the west, is used for livestock. The Paraguay River, which connects the north to south, is the main commercial road in a country without access to the sea. Many Brazilians living in Paraguay, the brasiguaios, occupying an area increasingly close to the border with Brazil, a source of tension with the locals. Famous center of smuggling, the country is of international trafficking route for drugs. After decades of dictatorship, the political system is unstable and suffers from high degree of corruption. The hydroelectric dams built in association with Brazil (Itaipu) and Argentina (Yaciretá) provide abundant and cheap energy to the country.