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Measuring Debt Relief with Commonwealth Secretariat's Debt Recording and Management System

7 October 2005

Sri Lanka's High Commissioner to the UK, Kshenuka Senewiratne
Sri Lanka's High Commissioner to the UK, Kshenuka Senewiratne

The impact of debt relief offered by donor countries to Sri Lanka following the tsunami disaster, which struck the Indian Ocean state in December 2004, was measured using the Commonwealth Secretariat Debt Recording and Management System (CS-DRMS).

Sri Lanka's High Commissioner to the UK, Kshenuka Senewiratne, said CS-DRMS has proved useful to her country, particularly at such a critical time. Speaking at the 20th anniversary celebration of CS-DRMS at the Commonwealth Secretariat in London, UK, on 7 October 2005, Ms Senewiratne stated that her country's Ministry of Finance was able to calculate Sri Lanka's overall debt servicing commitments for this year, after taking into account the debt relief.

The High Commissioner said Sri Lanka was the first country in the Commonwealth to adopt CS-DRMS at its Ministry of Finance. Recently, a Debt Management Office was set up in the country with the assistance of the Secretariat.

"This capacity-building exercise has also been a great success, and is a clear demonstration of the pragmatic contribution the Secretariat has been making towards increasing public sector efficiency and effectiveness. The CS-DRMS is a clear example of how the Commonwealth is helping member governments to manage their external and domestic debt commitments," stated Ms Senewiratne.

Today, 44 Commonwealth and 12 non-Commonwealth countries use the CS-DRMS, with non-members China and Bhutan being the latest users of this software.

Commonwealth Secretary-General Don McKinnon
"CS-DRMS is a good example of partnership both within and outside the Secretariat." Commonwealth Secretary-General Don McKinnon
The CS-DRMS was developed in response to the 1980s debt crisis, which started in Mexico and spread rapidly to many developing countries, including those in the Commonwealth. This software records and manages different types of debt -- domestic or external, short, medium and long-term. It enables countries to better track their debt, review options for restructuring, evaluate sources of borrowings and plan new loans. The software system assists finance ministers and Central Bank governors to manage their country's debt more effectively. CS-DRMS also offers links to tools used for debt sustainability analysis such as the World Bank's Debt Sustainability Model plus.

Commonwealth Secretary-General Don McKinnon said the CS-DRMS is a good example of partnership both within and outside the Secretariat. Its success has led to the software being translated into French and implemented in countries outside of the Commonwealth. Fourteen Heavily Indebted Poor Countries currently use CS-DRMS.

"This year, we are also celebrating 12 successful years of partnership with the Crown Agents, which are our official CS-DRMS distributors to non-Commonwealth countries. I am happy to announce that a new distribution agreement with the Crown Agents was signed this afternoon. This new agreement will, I hope, reinforce the collaboration that exists between our two institutions and further extend the distribution of CS-DRMS beyond the Commonwealth," said the Secretary-General on 7 October.

David Phillips, Executive Director of Crown Agents, said: "Countries which use the CS-DRMS have one of the most powerful reporting and analytical tools to help them ensure that the proceeds of loans and grants do what they are supposed to: that is to transform financial flows into real development needs and to prevent the portfolio from becoming unsustainable within the limits of factors they can control directly."

Mr Phillips said the CS-DRMS is an important component of his company's suite of software applications for public financial management, which helps countries improve their budget financing by increasing customs and tax receipts, creating more flexibility in filling the financing gap with loans and grants. He welcomed the Secretariat's initiative in producing guidelines for public financial management and expressed the interest of his company in further collaborating with the Secretariat. 

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