The story starts in the 80s, when UNCTAD was looking at debt issues…
The question of debt has been intensively examined within UNCTAD since the first session of the Conference. Already before the debt difficulties of the developing countries came to world-wide notice by the Mexican crisis in 1982, UNCTAD had turned its attention to possible ways and means of alleviating the debt burden.
Thanks to its participation in Paris Club meetings, UNCTAD accumulated experience dealing with the debt problem and came to know first-hand the strengths and weaknesses of debt management systems in a large number of developing countries. As a result, UNCTAD considered that enhancing the capacity of developing countries to manage their foreign debt would make a significant contribution to disentangling some aspects of the debt problem and in general lead to better external resource management.
How was the idea of creating a debt management system born?
The idea of creating a computer-based debt management system (CBDMS) emerged very naturally from this experience. The participation of an UNCTAD representative in the meeting of the Paris Club in the early 1980s confirmed that this lack of information applied generally to developing countries as a whole. The question that arose at this stage was, why did countries not develop their own CBDMS?
There were two major reasons why the debtor countries did not have accurate debt data and performing CBDMSs. The first was the lack of centralized information on foreign debt and inadequate legislation on public guarantees. The second was the unavailability of debt managers to produce comprehensive specifications for the computer specialists. The urgent nature of the problems facing debt managers would lead them to address a specific problem, for instance preparing for the Paris Club and then for the negotiations with private banks. This implied the collection of data from two different databases and the development of two different computer systems. Once developed, these two systems would be interfaced, the outcome being an inflexible and unpractical computer patchwork, expensive to maintain.
In 1981, four countries, namely the Plurinational State of Bolivia, Costa Rica, Liberia and Madagascar, formed the initial pool that allowed the development of DMFAS: the first version of DMFAS for personal computer was released in 1983. Except for Liberia (due to the recrudescence of civil war), these countries were the first users of DMFAS.
UNCTAD staff has thus built up a computer-based debt management system, known as the Debt Management and Financial Analysis System (DMFAS) to fulfil the operational, statistical and analytical needs of debt management and external financial planning.
For more details on UNCTAD's work on debt, see Chapter V,C. The debt crisis of the developing countries, UNCTAD at 50 - A short history, UNCTAD/OSG/2014/1.