Development Alternatives Inc., a major American development contractor, will open a center in Pakistan to train local nongovernmental organizations to obtain and carry out foreign-funded development projects, the company announced today. The move follows the Obama administration’s decision to move its aid spending in Pakistan away from U.S. contractors and NGOs, and channel it increasingly through Pakistani organizations. That spending could be as much as $7.5 billion over the next five years.

Steven O’Connor, DAI’s communications director, told ProPublica that DAI began planning the training program in light of the administration’s policy shift, and that the company has a long-term incentive to be seen as a credible partner by Pakistani NGOs and development organizations.

DAI is paying for the training program itself, with no financial assistance from the U.S. Agency for International Development, the agency that will oversee the $7.5 billion aid package. Participants will likely be asked to pay to take some of the classes, but O’Connor said he doubts those fees will cover the costs of the program. DAI expects to offer the first classes as early as next month.

"We want to make that bridge with these groups," he said. "We’re not trying to present this as an entirely altruistic venture. This is a business development decision. But it’s also doing the right thing."

Development experts praised DAI’s initiative. But they stressed that the training program needed to focus on making Pakistani organizations sustainable, and had to be coupled with effective USAID oversight of how U.S. government dollars are spent on whatever projects those organizations took on.

Charles Cadwell, director of the Center on International Development and Governance at the Urban Institute, a Washington, D.C., think tank that works with USAID in Pakistan, said DAI’s plan would help improve Pakistan’s NGO sector. But he cautioned that changing the mind-set of local organizations takes time.

"The real challenge is not finding [local] NGOs, as much as it is finding the oversight," Cadwell said.

Cadwell said his only question about DAI’s training program was, "Why isn’t AID paying for that?"

Harry Edwards, a spokesman for USAID, responded that the agency is putting out a grant that would fund a similar project, designed to increase the ability of Pakistani organizations to provide assessment and oversight. USAID has said it plans to request applications to run that project, which we wrote about last week, in February.

A former USAID mission director, who asked not to be named because he now works for a contractor that has projects with the agency, also praised DAI’s announcement. But he stressed the importance of strengthening local organizations so they’re not dependent on continued support from international contractors, which he said could become "another way of having money passing through the [foreign] contractor."

"The whole purpose of these programs is to develop the vision, the management structure, the leadership skills, the raising of indigenous funds and the financial capability to ensure very careful management of resources," the former mission director said. "As the project comes to a close, one should make the transition to a sustainable operation."