The Republic of Paraguay is a landlocked nation located between Brazil, Argentina, and Bolivia. Its success in the Chaco War against Bolivia has left the military in an incredibly respected political position, and after two coups in 1934, the country finally enjoys peace and stability.
After the devastating War of the Triple Alliance, Paraguay was shattered and broken almost beyond recognition; the vast majority of its male population dead or orphaned. The extreme demographic and economic damage was not all, however, as both Brazil and Argentina took slices of land off the Guarani Republic and effectively only kept its sovereignty as a buffer state between the two nations. Rebuilding and recovering from that disaster was no easy feat, and political instability still corroded the nation. In 1904, a Liberal revolution against the rule of Colorados broke out. The Liberal rule started a period of great political instability, which culminated in a Civil War in 1922 between rival political factions.
And then, in late 1929, war again came to Paraguay by the hand of Bolivia. That nation, under economic pressure to secure the rumored oil wells of the Chaco region, aggressively started to assert its claims in the disputed area. The Chaco War took four gruesome years, and by 1933 Paraguay had completely routed the Bolivian forces and were starting to occupy their lands. The total victory did not come without a cost however, as mounting debt and military expenses continue to be a burden on the government. The Bolivian military was poorly equipped and poorly trained to fight in the region, and its low morale meant the Paraguayan casualties were far smaller.
The political situation did not improve, however, and the Liberal rule was faltering. Rafael Franco and other radical leaders launched a coup in 1934 based on left-authoritarian principles but were deposed after a short three-month rule by Chaco War hero José Félix Estigarribia. Now, the age of liberal chaos is over, and José Felix's rule is one of great peace; his actions against the ''Syndicalist'' Franco and Bolivian invaders greatly influencing politics, as he is almost unanimously acclaimed as a national savior and hero. With the rise of the Argentine Patriotic League, Estigarribia and his cabinet are again in high alert, as Manuel Carlés did little to hide his expansionist goals in his speech upon ascending to the leadership of that nation.
The longstanding power of the Liberal Party was challenged in the Civil War, but the Chaco War truly changed the rules of Paraguayan politics. The popularity of the military soared as defenders of the nation, as did the popularity of Louisiana Governor Huey Long, who did proclaim with great frequency in the late stages of the war that it was all a plot by Standard Oil to loot both nations. Said popularity continued to increase after the war, with one city near the Bolivian border named after him right after the war ended in 1933. José Felix's government enjoys good relations to this day with Long and his allies in the US and has publicly stated he hopes Long wins the coming elections.
José Felix and his allies may have deposed Rafael Franco's oddball alliance of radicals, which included Anarchists, Syndicalists, and radical liberal members, but it did inherit and expand on many concepts brought by that group. Nationalism is fast on the rise, and loyalty to the nation first and to ideology later is now the norm. Old presidents such as Solano Lopez are seen as heroes, and an extensive land reform program is underway, and worker rights have been upheld for the first time in the Republic's history. In the upcoming 1938 election, it's in all likelihood that Felix and his allies will remain in power.
The Army of Paraguay is a greatly respected and powerful institution, and many young men joined it since the Chaco War. However, it's mounting expenses are a colossal drain on the state budget, and managing it may be a significant challenge. Paraguay has 3 permanently stationed regular divisions, one guard division, and 3 militia divisions, all of these in much better shape than most of their neighbor's military forces.
Despite having sea access via the Paraná river, Paraguay has no proper navy to speak of.
The Paraguayan Air Force consists of a few Bolivian-German captured planes and a few American planes which are quite outdated. It performed better than their Bolivian counterparts in the Chaco War, however
Good Relations with Argentina, Uruguay, and Brazil
Poor Relations with The United States of America
Very Poor relations with Peru and Bolivia