Incumbent Georgian President Mikheil Saakashvili conceded defeat Tuesday in parliamentary elections held the previous day, paving the way for a transfer of power to a coalition headed by the richest man in the country, billionaire Bidzina Ivanishvili.

 

Saakashvili’s National Movement suffered substantial losses in a clear vote against the man who came to power in 2003 at the head of the US-backed “Rose Revolution.” Shortly before Georgians went to the polls, the largest anti-government protests since 2003 took place in Tbilisi, involving an estimated 100,000 people.

 

According to the latest figures, Ivanishvili’s Georgian Dream alliance won 53 percent of the vote. His party was founded only in April of this year and has no parliamentary representation. Saakashvili’s party received just 41.7 percent nationally and fared much worse in the capital city of Tbilisi.

 

The figures suggest that Ivanishvili’s party will get about 93 of the 150 seats in parliament, with Saakashvili’s National Movement taking around 46 seats. Some 11 seats are still unclear.

 

Saakashvili will remain as president until presidential elections set for next year, and Ivanishvili will become prime minister.

 

Saakashvili’s policies in recent years made clear that the so-called “Rose Revolution” had nothing to do with genuine democracy. Rather, the political overturn was driven by the efforts of the United States to extend its influence in the Caucasus and other former Soviet territories at the expense of Russia by engineering a realignment within the ruling elite in Georgia.

 

Saakashvili was openly anti-Russian and pro-American, and promoted a combination of free market economics and anti-Russian Georgian nationalism. Today, the country is in deep social and political crisis.

 

The elections themselves were far from democratic. According to the testimony of observers, there were grave irregularities in the vote count at several polling stations. Special forces stormed some polling stations to intimidate observers and falsify ballot papers in favor of the government. Even the web site of the Election Commission was attacked by hackers early Tuesday morning.

 

The country’s political future is now uncertain. Saakashvili will not be able to contest next year’s presidential election. Like his Russian counterpart Vladimir Putin, Saakashvili had intended to assume the post of prime minister. Now his plans have been thrown into disarray by the election victory of Ivanishvili’s party.

 

The candidacy of Ivanishvili, who first announced his intention to run a year ago, revealed the divisions within the ruling elite in the face of increasing social polarization and growing conflicts between the great powers.

 

With a personal fortune of $6.4 billion—more than half the gross domestic product of the entire country—Ivanishvili is one of the 200 richest people in the world. Like most of the nouveau riche in the former Soviet Union, he made his fortune in the 1990s by buying state property cheaply and reselling it at a huge mark-up.

 

Since then, he has been linked closely to Russian oligarchs. In 2003, he supported the “Rose Revolution” and for some time was a major financier of the Saakashvili government. He claims to have fallen out with Saakashvili in 2007.

 

Both Ivanishvili and Saakashvili represent the tiny financial elite of the country and both support further cuts in social spending. Both support Georgia joining NATO and extending the country’s strategic relationship with the United States. However, unlike his rival, Ivanishvili also wants a rapprochement with Russia.

 

Relations between the two countries have remained tense since the Russian-Georgian war in the summer of 2008. Both Putin and Saakashvili repeatedly seek to aggravate tensions to divert attention from the social crisis in their respective countries. In the election campaign, Saakashvili once again adopted an aggressive posture towards Moscow.

 

For his part, Ivanishvili declared, “We have to talk to Russia to normalize our relations.” He indicated that the issue of relations with Russia was the main cause of his clash with Saakashvili in 2007.

 

The United States has notably distanced itself from Saakashvili in recent months while maintaining its strategic support for his government.

 

One reason for the deterioration of US relations with Saakashvili is Georgia’s close relations with Iran, one of Georgia’s most important economic partners. Saakashvili has sought to mediate between the US and Tehran. In the spring of this year, Saakashvili even invited an official from the Iranian Ministry of Defence to take part in a military exercise involving Georgian and US troops.

 

The outcome of the elections clearly shows the social and political discontent within broad layers of the population. The economic impact of the five-day war with Russia and the post-2008 economic slump are still clearly felt. Saakashvili has sought to recover the billions paid to foreign creditors by imposing massive cuts in already meager welfare and social benefits.

 

According to official sources, a third of Georgia’s 4.5 million inhabitants live below the poverty line which is set at an income of €70 per month. Almost two-thirds of the population (61 percent) earns less than $240 a month.

 

The average pension is €37, well below the poverty level. Unemployment is very high and is currently the single biggest social problem. It officially stands at 16 percent, but unofficial sources put the figure at 30 percent. In many agricultural regions, fifty percent of the population is unemployed.

 

Just weeks before the election, the Saakashvili government was rocked by a major scandal involving abuse in the prisons, which once again underlined the undemocratic character of the regime and outraged much of the population. On September 18, two television channels close to the opposition showed video footage of torture and the sexual abuse of a number of prisoners by their guards in the Gdani-8 prison in Tbilisi.

 

Thousands of people protested against the government in the ensuing days. According to reports, members of the families of prisoners stormed the Gdani-8 prison and demanded to see their friends and relatives. One woman had seen her son on the video and said, “He told me, ‘Say nothing, otherwise they will kill me’.”

 

Georgia has one of the highest per capita prison populations in the world, with 531 inmates for every 100,000 inhabitants—a figure even higher than in neighboring Russia.

 

The interior minister of the country, Bacho Akhalaia, was forced to resign over the scandal, and President Saakashvili dismissed the justice minister, Khatuna Kalmakhelidze.

 

Three days before the election, around 100,000 people, including many students, demonstrated in Tbilisi. The protest was led mainly by the opposition parties and student organizations.

 

Many of the protesters, however, spoke out against both political parties. David Parulava, a student who had protested against the ill treatment in prisons, told the online media outlet Eurasianet that the choice between Saakashvili and Ivanishvili was “a choice between bad and worse, and I’m not even sure who’s bad and who’s worse. I trust neither side.”