North Korea, one of former President George Bush’s “axis of evil” countries and one of the few remaining Stalinist states, deserves to be re-evaluated given the prospect of a power succession and the changing economic landscape in the region, according to Goldman Sachs.

Apart from the robust military establishment (absorbing at least 20-30% of GDP vs 3% of GDP in South Korea),  Goldman says North Korea has large untapped potential, including rich human capital, abundant mineral resources (valued at around 140 times 2008 GDP) and significant room for productivity gains.

“We project that the GDP of a united Korea in dollar terms could exceed that of France, Germany and possibly Japan in 30-40 years, should the growth potential of North Korea, notably its rich mineral wealth, be realised,” the bank’s economist Goohoon Kwon says in a paper.

“This projection would put the size of a united Korea in 2050 firmly on a par with, or in excess of, that of most G7 countries, except for the U.S.

Readers of Global Investing may be aware that there are investors who are already looking at North Korea’s potential.