Israel's population is now 7,150,000, a 1.8 percent increase over last year's Independence Day, reports the Central Bureau of Statistics. Our newest citizens include some 148,000 babies born in 2006, and 18,400 new immigrants. It has been reported that over the past year, for the first time since the period of hyperinflation around 1983 and the first year after the 1973 Yom Kippur War, departures have exceeded new immigrants. But the CBS also notes that, out of 24,000 Israelis who left the country in 2004 for a period of more than 12 months, 40 percent - 10,000 - have returned. Meanwhile, the proportion of Jews to non-Jews has stayed stable at 80% to 20%. The first thing that must be said of these figures is that they represent the success of the Zionist dream. Israel's population is almost nine times the population in 1948, about 800,000. In the early 1970s, Israel's GDP per capita was $3,400. Now it is about $21,000, which is 45th in the world and furiously making up for lost ground during recent years of recession. This success, however, is far from complete. For some years, for example, it has been noted that the Negev and Galilee, while comprising over 60% of Israel's territory, are home to only about 9% of our citizens. And this small population is scattered mainly in "development towns," many of which are better known for their lack of economic development compared to the center of the country. Obviously, there is something wrong with the strategy Israel has pursued for these areas. This strategy had been dominated by grants, subsidies and tax breaks to promote economic development, along with much talk of high-speed trains and other grand infrastructure projects. The latest of these plans was approved on Sunday by the cabinet, this time to concentrate IDF training bases in a "Bahadim City" (after the Hebrew acronym for training base) in one spot a few kilometers south of Beersheba. Moving certain government and IDF operations from inside cities to the periphery certainly makes sense, and is long overdue. Prime Minister Ehud Olmert described the move as "a historic moment for the Negev ... [that] will change the face of the entire area, will create thousands of new jobs, and will give a boost to the transfer of quality people to the south." Yet the move, however warranted and overdue, belongs to the government-driven development paradigm, which can help but is no panacea. Build a factory, or a base, and the people will come, goes this decades-old mantra. Some ideas along these lines, like Bahadim City, make sense. But much of the money spent on development has been wasted. Fortunately, as happened in the case of birthright israel and other programs that started as private initiatives, a new development paradigm is gathering steam. Founded by two students who bought a few dilapidated caravans with their army discharge grants, a group called Ayalim (http://www.ayalim.org.il) has built five student villages in the past five years, now housing 300 students. The students, who study at universities in the periphery, receive subsidized student housing and scholarships in exchange for dedicating their vacations toward building villages, plus 10 hours a week of community service. The result has been the creation of tight-knit communities of young, educated pioneers, many of whom become hooked on living in the area rather than going back to homes or jobs in the center. Ayalim is turning the old model on its head: instead of trying to bring jobs to entice people, it is keeping young and idealistic people in the area, with the expectation that they will create and expand employment opportunities. The Ayalim model would seem to be scalable. Thousands of students apply for the current 300 spots, so there seems to be no shortage of student demand. With more public and private support, the students of Ayalim could well bring real development, not just "development towns," to our struggling periphery.