Georgia’s president concedes defeat
GEORGIAN billionaire Bidzina Ivanishvili’s opposition coalition unexpectedly won a parliamentary election on Monday, dealing a blow to US-backed President Mikheil Saakashvili, who conceded defeat yesterday.
The president said his United National Movement (UNM) would move into opposition after unofficial results showed Mr Ivanishvili’s Georgian Dream had 53.1% versus 41.6% for UNM. The Organisation for Security and Co-operation in Europe (OSCE) said the elections were fair and free.
“As the leader of the UNM, I am saying that the party is going into opposition,” Mr Saakashvili told supporters yesterday. “I respect the majority’s choice.”
Mr Saakashvili, who allied the country with the West and has a year remaining in his presidential term, rose to power in the 2003 “Rose Revolution” and is credited with fostering an economic turnaround in Georgia, a key link in energy-transit routes between Europe and the Caspian Sea.
Mr Ivanishvili, accused by the government of ties with Russia where he made his fortune, said Mr Saakashvili had curtailed free speech and political competition. Georgia fought a 2008 war with Russia in a failed bid to regain control of a breakaway region.
Mr Ivanishvili, who was stripped of his Georgian citizenship and holds a French passport, is worth $6.4bn, according to Forbes magazine, equivalent to almost half of Georgia’s $14.4bn economy. He made his money in banking and the sale of metals before giving up his Russian citizenship and selling his assets there this year to focus on Georgian politics. He says he has spent $1.7bn of his own money on initiatives to overhaul Georgia’s police force and military, among others, and would gradually normalise relations with Russia. He denies any ties to President Vladimir Putin’s government.
“The strong showing for opposition is a clear message to Saakashvili that his policies were not supported by the entire population,” IHS Global Insight analyst Lilit Gevorgyan said. “He can no longer afford dismissing opposition figures as Russian agents or enemies of Georgia.”
Georgia’s dollar-denominated government bonds due in 2021 fell yesterday, pushing the yield to 4.749% from Monday’s record-low 4.712%, according to data.
Mr Ivanishvili said yesterday his government will be proEuropean Union and will sort out relations with Russia while convincing it that Georgia’s membership of the North Atlantic Treaty Organisation security alliance is important and not a threat.
Georgian Dream had warned Mr Saakashvili against seeking to rig the vote, saying the country “stands on the threshold of a new dawn of democracy.”
The OSCE, a 56-nation democracy watchdog that deployed 400 observers monitoring the vote, said the elections “marked an important step in consolidating the conduct of democratic elections”, though “certain key issues” remain to be addressed and the environment was “polarised and tense” with some instances of violence.
“The elections were competitive with active citizen participation throughout the campaign, including in peaceful mass rallies,” the OSCE said yesterday. “Freedoms of association, assembly and expression were respected overall,” the organisation said.
While Mr Saakashvili’s party held a lead of more than 20 percentage points last month, the September 18 release of footage showing prison guards beating and raping male inmates with a broom handle and truncheon sparked mass protests in the country ruled for the past nine years by Mr Saakashvili.
“The market was not expecting this result at all, given opinion polls,” said Timothy Ash, head of emerging-market research at Standard Bank in London. “If we see reserve flight accelerating on the back of heightened political risk, investors might look to lighten up.”
Up for grabs is the prime minister’s post, which will become more powerful than the presidency once Mr Saakashvili ends his term next year because of legislative changes two years ago. Bloomberg