No clear answer to $15bn question

Dubai's debt woes have been discussed ad infinitum. The chatter started in 2009. More than two years later, nobody seems to be able to drop the issue and move on, and for good reason.

Dubai's debt woes have been discussed ad infinitum. The chatter started in 2009, when Dubai World delivered a shock by announcing it would seek a standstill on debt repayments as it negotiated a restructuring.

More than two years later, nobody seems to be able to drop the issue and move on, and for good reason.

Dubai still has debt problems. Even after Dubai World finalised a US$24.9 billion (Dh91.46bn) debt restructuring this year - and even after several other companies owned by the Dubai Government made progress on their own restructurings - analysts continue to raise concerns about the emirate's financial health.

The numbers explain. Most economists and analysts agree that Dubai Government-related companies must repay about $15bn next year. The emirate and its government enterprises - often referred to as "Dubai Inc" - have a total debt load of about $120bn.

Those figures are nothing to laugh at. While minuscule compared with the hundreds of billions of euros of aid being dished out to debt-saddled European countries, Dubai's debts amount to as much as or more than the emirate's GDP, depending on whose estimate of GDP you accept. And the continuation of the European debt crisis, coupled with rough seas for the US and other developed countries, has made refinancing loans and going back to business as usual all but impossible.

It is unclear precisely how Dubai will manage its debt maturities next year. Officials have said the emirate has no intention of restructuring at its companies. But analysts offer the caveat that some might not be able to refinance, given the strained conditions of global lending markets.

How this plays out is anyone's guess. What is clear, though, is that the success of Dubai's refinancing plans next year depend a great deal on factors beyond the emirate's control.

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