- - Wednesday, October 10, 2012

ANALYSIS/OPINION:

Georgia’s recent parliamentary elections proved surprising to many. The ruling United National Movement Party, led by President Mikhail Saakashvili, lost its majority.

With a bronze bust of Ronald Reagan clearly visible in the background, Mr. Saakashvili graciously conceded defeat in a televised address to the nation. The newly formed Georgian Dream coalition, led by billionaire Bidzina Ivanishvili, now controls the parliament.

Mr. Saakashvili had steered Georgia on a path toward democracy, economic liberalization and Euro-Atlantic integration. But given Mr. Ivanishvili’s close links to Russia – and the presence of numerous Soviet revisionists in his motley Georgian Dream coalition – it’s not at all unlikely that the nation may veer onto a decidedly different course.


Nevertheless, this election represents a coming of age for Georgia. It was tranquil. International observers gave it high marks for openness and fairness. Clearly, the seeds of democracy first planted by Mr. Saakashvili after the peaceful 2003 Rose Revolution are now bearing fruit.

Mr. Ivanishvili has big shoes to fill. The Georgia that Mr. Saakashvili inherited in January 2004 looked much different from the Georgia of today. No longer regularly described as a “former Soviet state,” the nation is now regarded as a beacon of hope for the region.

Just look at the economic progress that has been made. The budget deficit has been slashed, and the Georgian economy is predicted to grow by almost 6 percent this year.

The 2012 Index of Economic Freedom, published by the Heritage Foundation and The Wall Street Journal, ranks Georgia 34th out of 184 countries – a striking improvement from 2003, when it ranked 113. Economic reform enacted under Mr. Saakashvili has given Georgians greater economic freedom than the citizens of 26 other European nations, including France, Spain and Belgium. It has also produced a flood of foreign direct investment. The capital city of Tbilisi and the Black Sea port of Batumi are bustling as never before.

However, a lot of people felt left out of Mr. Saakashvili’s new and modern Georgia.

Cutting government bureaucracy and fighting corruption meant firing and replacing thousands of venal officials. In the case of the Georgian traffic police – once viewed as the most corrupt organ of government – Mr. Saakashvili sacked the entire force. This anti-corruption drive created a lot of animosity, especially among the pre-Rose Revolution old guard who were skeptical of the democratic reforms. This resentment appears to have partially fueled much of this year’s electoral backlash.

Mr. Ivanishvili’s electoral success cast uncertainty over Georgia’s future. Under Mr. Saakashvili, Georgia emerged as a steadfast ally of the United States and NATO. When the Russians invaded Georgia in 2008, the republic’s troop commitment to coalition forces in Iraq was second only to that of the U.S. Today, even though Russia occupies 20 percent of its territory, Georgia remains one of the largest troop contributors to Afghanistan.

But Mr. Ivanishvili’s ties are with Moscow – not the West. He was one of the few who profited handsomely from the rapid privatization of state monopolies after the fall of the Soviet Union. Until recently, he was the single largest private shareholder in the Russian natural-gas company Gazprom. Forbes magazine recently estimated his personal wealth at $6.4 billion, nearly as much as 45 percent of Georgia nominal gross domestic product.

Despite vaguely reassuring public utterances, Mr. Ivanishvili is thought to want to slow down, if not halt altogether, Georgia’s integration into Euro-Atlantic structures like the European Union or NATO. His party has not ruled out Georgia someday joining Russian President Vladimir Putin’s dream of a Eurasian Union, loosely modeled off the European Union.

Mr. Saakashvili, meanwhile, is preparing his party for a new role: That of loyal opposition. But his actions as president – and his graciousness in electoral defeat – all but guarantee his place in history as the founding father of the modern and democratic Georgia. No world leader or statesman could ask for any better legacy than that.

• Luke Coffey, a specialist in U.S.-European relations, is the Margaret Thatcher Fellow at the Heritage Foundation (www.heritage.org).