KEY POINTS
  • A peace treaty formally ending the Korean War and opening the North-South border would increase foreign investment, helping the economy, UBS economist Li Zeng and analyst Yong-Suk Son say.
  • North Korea could also then utilize its natural resources and well-educated labor force, the analysts say.
  • The state could then account for up to 24 percent of the Korean Peninsula's total gross domestic product in 20 years under reunification with the South, the report says.
An employee of the Ryo Won Footwear Factory operating a machine making shoe parts in Pyongyang, North Korea.

North Korea could account for up to 24 percent of the Korean Peninsula's total gross domestic product in 20 years under reunification with the South, UBS estimated in a report this week. The rogue state currently accounts for 1.1 percent of the regional economy.

Tensions around the nuclear state have eased after North Korean dictator Kim Jong Un met with the leaders of South Korea and U.S. While it's far from clear whether the two halves of the peninsula will ever reunify, they may be closer to establishing two peaceful, independent states, which by UBS' analysis would also help growth.