04/10/2012 05:39 BST | Updated 02/12/2012 05:12 GMT

A Georgian Dream - or Tumultuous Times Ahead?


As the final Georgian ballots were cast on Monday evening a series of election polls predicted a momentous point for the South Caucasus state: potentially the first peaceful change of government in the country's modern independence. That point was confirmed this morning when President Saakashvili, leader of the incumbent United National Movement (UNM), conceded defeat in a televised address to the Georgian people.

Billionaire businessman Bidzina Ivanishvili's Georgian Dream coalition is currently claiming a victory of potentially over 100 seats in the new, 150-member parliament. While Georgia's electoral system, which puts 73 seats to constituency contest and 77 to a party list vote, can be challenging to call, it is now completely clear that Ivanishvili will have a majority.

The implications of these results will be particularly significant as the locus of power next year moves from the Presidency to the Prime Minister's office. Years of speculation over whether Saakashivili was planning to "do a Putin" are now suddenly moot as Ivanishvili prepares to form a government. There are still questions though as to how the Georgian Dream coalition will function; murmurings of discontent with their leader have come from within the ranks of the movement for some time now. An eclectic candidate list ranging from long-time political hacks to retired footballers may not be easy to handle in power. Neither will co-habitation be easy: Presidential elections - and the simultaneous constitutional changes - aren't due for another 12 months. The thinly justified arrests, fines and odd behaviour on both sides that has accompanied the usual mud-slinging in this election are unlikely to make for an easy relationship as Prime Minister and President try and work together.

Recent scandals have cost the UNM, and a period in opposition may be a development that will help both the stability of the party and the longer-term stability of the country. Anger is still high over a recent prison scandal that saw Georgians take to the streets and secure the resignation of Interior Minister Bacho Akhalaia. A job switch for Saakashvili would have been a democratic disaster, and a coronation of incumbent PM Merabishvili as the country's leader would have been little better. While the UNM swept in with a host of bold policies, reforms have stagnated since the heady days of 2004. Indeed, prisons are not the only source of trouble, just the one that broke at an (in)opportune time. Elsewhere, the judiciary has long had an unreasonably high conviction rate, civil society still lacks clout and there are increasingly entrenched political elites emerging in the ruling party.

Having weathered the election, the country now faces a number of challenges. Internationally, Tbilisi's relationship with the Kremlin is still on ice, although Ivanishvili has promised to restore ties. Now may be a good time to improve the relationship: Georgia's NATO membership is all but stagnant and the Kremlin's issues in the restive North Caucasus were brought to Georgia's doorstep with an armed kidnapping last month. Whether that will be possible while the President's office retains power is however doubtful; Putin and Saakashvili have a well-documented and genuine personal loathing for each other. There are ongoing territorial conflicts over South Ossetia and Abkhazia in need of positive action (especially in advance of the 2014 Winter Olympics in Sochi), and foreign policy regarding the EU and NATO remains an issue. Domestically of course, reforms to the prison system will surely be a priority, along with the ongoing challenge of increasing the prosperity of the average Georgian citizen.

The biggest risk for the country now seems to be internecine infighting between the two political groups. Political instability would likely see a drop in economic confidence that the country can scarcely afford, and Georgians expect and desire growth and stability to match the high rhetoric of the last ten years. Saakashvili has taken the first step towards delivering a stable future with his concession of defeat today; he will have to continue that trend with a gracious farewell address in 12 months time.

In the coming weeks we will see how the dynamic plays out between the two sides. It may take a substantial amount of patience for two men used to seeing their writ run easily meet with potential disagreement from the other's office. The one thing that is clear: this next year will be difficult, potentially tumultuous, but a landmark in Georgian, and South Caucasian politics.

(Thanks to Dan Ridler of Sibylline, who produced the material for this post)