Saakashvili Faces Struggle after Georgia Win

TBILISI (Reuters) – Mikhail Saakashvili–whose crushing win in Georgia’s presidential vote was beyond doubt on Monday–faces an uphill struggle to reshape his small Caucasus nation plagued for years by separatism and poverty.

As the central election commission slowly counted the votes to confirm Saakashvili’s win–the US-educated lawyer was at a government residence likely contemplating the first steps he would take after ousting veteran leader Eduard Shevardnadze.

Widespread corruption and separatist conflicts since the fall of the Soviet Union in 1991 have battered Georgia’s economy and infrastructure and deterred investment.

Half of Georgia’s 4.5 million population lives on less than $4 a day–and state finances are bled white by a shadow economy accounting for 60 to 70 percent of activity.

Saakashvili says his focus will be on dragging the economy out of its perilous state by fighting corruption–encouraging foreign investment and forging closer ties with Western Europe and the United States.

The new leadership–ushered in after a "rose revolution” in November–won praise for the election from the Organization for Security and Cooperation in Europe–the rights group. It said it was a "welcome contrast” to a November parliamentary poll that sparked mass protests against Shevardnadze.

Saakashvili had said he wanted a smooth presidential poll to calm any fears of those who backed a $2.7 billion pipeline due to take Caspian oil across Georgia to Western markets starting in 2005. But the pipeline will not solve all Georgia’s economic problems.

"For the first step–we should really fight against corruption,” Acting President Nino Burdzhanadze–an ally of Saakashvili–told BBC television. "Without foreign investment ? it will be very difficult to improve the social and economic conditions of the people.”

ACT FAST

Analysts say Saakashvili must act fast after his inauguration on January 25 or risk losing the huge support he won in the uprising that toppled Shevardnadze in November.

"Saakashvili has so far done very well to destroy the former regime. Now we must see how he can construct a new state,” Archil Gegeshidze of the Georgian Foundation for Strategic and International Studies told Reuters.

It won’t be easy. He must also try to break a deadlock over Georgia’s two breakaway regions–Abkhazia and South Ossetia–and put them back under central control to boost tax revenues and exploit the tourist potential of Abkhazia’s Black Sea beaches.

He will also have a problem with the region of Adjaria–which is run as a personal fiefdom by Aslan Abashidze. Turnout in the election there was small–observers said.

Trying to balance a move towards the West with an attempt at improving relations with powerful neighbor Russia could also be difficult. Moscow has accused Georgia of not doing enough to root out Chechen rebels based in its border lands.

"He has inherited a very difficult legacy–of course. Clearly he has been given a very strong ‘carte blanche’ from the people–but this will not be on offer indefinitely … In October or November the people will be asking Saakashvili what he has done,” Gegeshidze said. His victory had still to be formally confirmed on Monday. Election officials said with less than one percent of the vote counted–Saakashvili had won with 95 percent on a high turnout. Exit polls on Sunday had given him 85.8 percent and another poll released on Monday gave him 95.4 percent.

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