Dubai looks like it will successfully raise several billion dollars of debt from the international capital markets in November.

Although it is trying to access debt markets without a published rating, the bond issue has forced at least a gesture of transparency from the notoriously secretive emirate.

The prospectus for the bond issue states that Dubai is under no obligation to stand behind the debts of quasi-governmental companies, such as Dubai World and Dubai Holding.

It also says the government sees its debts as amounting to $21.9bn, far below the $84.7bn that analysts, such as Egypt’s EFG-Hermes, say is the sum owed by the government and the companies in which it owns a stake.

The message will be a relief to potential investors in new debt coming from Dubai’s government, as the statement makes clear that Dubai will give preference to holders of government debt above holders of debt issued by its myriad connected companies.

“Dubai’s approach indicates that it may be starting to take a more commercial view of its state-affiliated businesses”

In the longer term, Dubai’s approach indicates that it may be starting to take a more commercial view of its various state-affiliated businesses, many of which have come undone as a result of the real estate crash and the drying up of liquidity in international markets.

Dubai’s economy needs to consolidate if it is to recover from this recession quickly. It would be detrimental to that recovery if government bailouts and financial support enabled companies to continue to operate based on business models that have been shown to be flawed.

Cutting the strings of government attachment will be a painful process and should prompt some fairly radical restructuring. The bloated real estate sector must become smaller and more efficient.

People’s jobs and reputations will inevitably be lost in the process. But if Dubai is to emerge from the mess that it created, pain is necessary.