Chile may be a thin country, but it’s home to some of the largest known copper reserves in the world. This Andean nation claims 28 percent of the world’s copper, an estimated 190 billion tons of the metal. That’s more than twice the amount of copper in Peru, the second-largest global producer. For Chile, that’s a crucially competitive distinction in an increasingly resource-hungry world.

Chile’s copper export revenue totaled USD3.5 billion in September, jumping from USD2.9 billion in August. According to a recent study by the US Geological Survey, if Chile’s rate of copper extraction continues at its historical pace, copper can be mined from the country for the next century.

The red metal accounts for more than 40 percent of the country’s exports and generates about a third of the government’s revenue. The fact that all of that mining is even occuring is largely thanks to Chile’s former dictator Augusto Pinochet. Although he was a brutal strongman infamous for torturing and imprisoning his opposition, he was also a firm believer in the free market system and implemented a raft of economic liberalization policies on assuming power.

Pinochet privatized most industry in the country, stabilized what until then had been an extremely volatile currency, made radical cuts to tariffs and opened his country to global trade. He also privatized Chile’s system of social security and kept national spending down to bare bones.

Make no mistake: Pinochet was a monster. Human rights groups estimate that his regime tortured, killed or imprisoned about 120,000 people. However, he left his country on sound financial footing when he handed power to a democratically elected successor in 1990.

Even as copper prices reached their nadir in 2008-2009, Chile had amassed about USD19 billion in reserves, which enabled it to implement a stimulus program in that period that amounted to about 3 percent of gross domestic product (GDP), without having to borrow.

Billionaire businessman Sebastian Pinera now serves as the elected president of Chile. A right-of-center politician who is the country’s most conservative leader since Pinochet, Pinera earned a doctorate in economics from Harvard, where he studied on a partial Fulbright scholarship.

So far, Pinera has cut business taxes, reducing Chile’s base business tax rate to 17 percent from 18.5 percent. He has also helped untangle at least some of the country’s regulatory web and is working to change the tax treatment of Chilean bonds held by foreigners to attract greater foreign investment.

At the same time, Pinera has increased his government’s educational spending by USD1 billion, resulting in one of the best-educated workforces in the world, with 52 percent of workers having a technical or college education.

Job creation in the country is on the rise and wages have been growing by about 3 percent per year. GDP per capita has also risen from USD15,900 in 2009 to USD17,400 last year, while unemployment has fallen to just 6.6 percent.

Over the past two decades, the Chilean economy has grown at an average rate of 5.5 percent. As the global economy has slowed over the past few years, Chilean growth has followed suit and is expected to grow just 4.4 percent this year. That trend is poised to turn next year, with GDP picking up to 5.1 percent according to the consensus forecast.

The pace of private consumption is also accelerating in Chile. After a slight 0.8 percent contraction in 2009, private consumption growth has averaged better than 5 percent annually over the past three years, providing a significant boost to Chile’s economy.

As a result of Chile’s strong governance, the poverty rate in the country has fallen to about 15 percent. However, wide inequality still exists in the country. The lowest 10 percent of earners take in just 1.5 percent of the nation’s wealth, while the top 10 percent accounts for 42.8 percent. The richest Chileans earn on average more than 13 times the poorest.

To help rectify these imbalances, the government is committed to growing investment and promoting increased job creation. Regardless, public debt accounts for just 9.2 percent of GDP and the country is rated as investment grade by all of the “Big Three” rating agencies

In 2010, Chile became the first Latin American nation to be granted membership in the Organisation for Economic Cooperation and Development. It’s also become an example for other mineral-rich nations in the world.

Under the auspices of the World Bank and the International Monetary Fund, Chilean officials have been working to help Mongolia, another copper-rich nation, strengthen its government policies by developing progressive social welfare laws while maintaining a rational government budget. That will help Mongolia manage the typical boom-bust cycles common in resource-rich countries.

Another key growth driver is the fact that Chilean companies are increasingly looking beyond their own borders for growth.

With a population of just 17 million, Chile is actually one of the smaller countries on the South American continent. Chilean companies have begun investing heavily in international expansion, particularly into neighboring Brazil. A great example of that trend is the merger of Chile-based LAN Airlines and Brazil-based TAM Airlines to form LATAM Airlines Group (NYSE: LFL), which I wrote about just a few weeks ago (see “Come Fly With Me,” Sept. 19 issue). All told, Chile’s central bank estimates that local businesses invested about USD12 billion internationally last year.

With a solid history of strong governance, a commitment to growth and an improving business environment, Chile has become one of the most attractive emerging markets in the world. Nonetheless, the nation will likely remain a resource-driven investment story for years to come. Thankfully, in this time of weak commodity prices, Chile has more to offer than just copper. See this issue’s Stock Spotlight for my favorite Chilean resource play.