LANDLOCKED Paraguay is sometimes called the “heart of South America”. If so, two great rivers are its arteries. Besides abundant hydropower, the Paraná and the Paraguay provide the lifeblood of the small, open economy—trade. In the absence of railways or good roads, it would seize up without the waterways. Improbably, Paraguay (population: 7m) boasts the world’s third-biggest fleet of tug-propelled barges, behind the United States (319m) and China (1.4bn).

On the outskirts of the capital, Asunción, a mountain of soyabean flour in a massive silo awaits loading. On the dock outside, a crane busily unpacks Japanese Isuzu lorries from a container vessel. In Puerto Fénix, business is up 75% in the past eight years, says Pablino Gómez, its operations manager.

Puerto Fénix is private, like most Paraguayan ports. In contrast to many countries, liberal Paraguay lets anyone purchase riparian property to set one up. Many have, so competition is fierce. Across the fence, Mr Gómez’s enterprise is flanked by two rivals. Margins have been squeezed, Mr Gómez admits, but larger volumes have made up for it.

Thank the landlubbers on Paraguay’s booming farms. Twenty years ago 15-odd convoys of 20-30 barges each plied the route from Brazil through Paraguay, to the sea in Uruguay and Argentina, recalls Fernando González of Naviship, a shipper. Today, 200 tugboats push round 2,200 barges, mostly brimming with soyabeans and other crops. Many are owned by foreign firms, including some from Argentina, domiciled in Paraguay to take advantage of its low taxes. It isn’t all plain sailing. Rock-bottom tax bills also mean fewer resources for public services. When local authorities left a dirt road linking Puerto Fénix to a motorway untended, the port paid to have it paved. Barges sometimes run aground, causing days of congestion, when the government fails to dredge some critical bend.

Waters have grown choppier, too. Since the Brazilian economy started sinking in 2014, upstream merchandise trade has foundered, even as farm exports downriver have held up. Convoys must typically sail full both ways to turn a profit. Some now struggle to stay afloat. In March and April Naviship had so few manufactures to tug back to Asunción, where most would be loaded onto lorries headed for Brazil, that it had to anchor two of its three container vessels.