First term[edit]
Saakashvili's inauguration as President of Georgia
On 4 January 2004 Mikheil Saakashvili won the presidential elections in Georgia with more than 96% of the votes cast, making him the youngest national president in Europe. on a platform of opposing corruption and improving pay and pensions. He has promised to improve relations with the outside world. Although he is strongly pro-Western and intends to seek Georgian membership of NATO and the European Union, he has also spoken of the importance of better relations with Russia. He faces major problems, however, particularly Georgia's difficult economic situation and the still unresolved question of separatism in the regions of Abkhazia and South Ossetia. Abkhazia regards itself as independent of Georgia and did not take part in the elections, while South Ossetia favours union with its northern counterpart in Russia.
Saakashvili was sworn in as President in Tbilisi on 25 January 2004. Immediately after the ceremony he signed a decree establishing a new state flag. On 26 January, in a ceremony held at the Tbilisi Kashueti Church of Saint George, he promulgated a decree granting permission for the return of the body of the first President of Georgia, Zviad Gamsakhurdia, from Grozny (Chechen Republic) to Tbilisi and renaming a major road in the capital after Gamsakhurdia. He also released 32 Gamsakhurdia supporters (political prisoners) imprisoned by the Shevardnadze government in 1993-94.
Anti Saakashvili poster in Tbilisi, 2006
In the first months of his presidency, Saakashvili faced a major political crisis in the southwestern Autonomous Republic of Adjara run by an authoritarian regional leader, Aslan Abashidze, who largely ignored the central Georgian government and was viewed by many as a pro-Russian politician. The crisis threatened to develop into an armed confrontation, but Saakashvili's government managed to resolve the conflict peacefully, forcing Abashidze to resign on 6 May 2004. Success in Adjara encouraged the new president to intensify his efforts towards bringing the breakaway South Ossetia back under the Georgian jurisdiction. The separatist authorities responded with intense militarization in the region, that led to armed clashes in August 2004. A stalemate ensued, and despite a new peace plan proposed by the Georgian government in 2005, the conflict remains unresolved. In late July 2006, Saakashvili's government managed to deal successfully with another major crisis, this time in Abkhazia's Kodori Gorge where Georgia's police forces disarmed a defiant militia led by a local warlord Emzar Kvitsiani.
Presidents Saakashvili and George W. Bush in Tbilisi on 10 May 2005
Although President Saakashvili's reforms are considered to have been of mixed success, the rate of corruption in the country has drastically reduced. According to the World Bank, Georgia is named as the number one economic reformer in the world and the country ranks 11th in terms of ease of doing business- while most of the country's neighbours are ranked somewhere in the hundreds.[9]
In his foreign policy, Saakashvili maintains close ties with the U.S., as well as other NATO countries, and remains one of the key partners of the GUAM organisation. The Saakashvili-led Rose Revolution has been described by the White House as one of the most powerful movements in the modern history[10] that has inspired others to seek freedom.[11]
Economic policy[edit]
Georgia has become involved in international market transactions to a small extent, and in 2007 Bank of Georgia sold bonds at premium, when $200m five-year bond was priced with a coupon of 9 per cent at par, or 100 per cent of face value, after initially being priced at 9.5 per cent and investors pushed orders up to $600m.[12]