Georgian Vote Spells No Reset with Russia – Analysts

"Relations will improve, because they can’t get any worse,” said Alexander Krylov, Caucasus expert at the Institute of World Economy and International Relations in Moscow.

With 47 percent of the votes counted as of Tuesday late afternoon, Georgian Dream’s support stood at 54 percent, versus 41 percent for Saakashvili’s United National Movement (UNM). Saakashvili on Tuesday announced that, in the new parliament, his party will be in opposition.

Saakashvili himself, however, is set to stay in power until the presidential elections in October 2013. As the constitution stands, he will not be able to run for re-election.

Georgia is set to move closer to a parliamentary republic after the 2013 vote, and recent reforms decreased presidential powers by increasing those held by the prime minister.

Although Saakashvili seems set to become a "lame duck,” he remains a tough political player who will not go down without a fight, Krylov said.

"The coming year will be a time of major political uncertainty spelled by the standoff between the president and parliament,” agreed Andrei Ryabov, an international affairs analyst at Carnegie Moscow Center.

Campaign promises put out by Georgian Dream’s leader, billionaire Bidzina Ivanishvili, included improving ties with Russia.

Relations between Georgia and Russia have not recovered since Tbilisi’s defeat in the 2008 conflict over South Ossetia. Russia recognized the independence of South Ossetia and another rebel Georgian republic, Abkhazia, and Georgia responded by severing diplomatic ties with Moscow.

Short-term change will likely be limited to a softening of the visa requirements between the two countries, and possibly broader collaboration on security in the Caucasus, a region plagued by Islamic insurgency, Ryabov said.

Moscow may also seek to further reassure Georgia that Russia poses no military threat, and could consider the return of Georgians exiled from the breakaway republics during the war, he added.

But no major turnaround in relations is expected because neither side offers any real solution for the broader Abkhazia-South Ossetia issue, analysts agreed.

Georgia needs better ties with Russia because its economy was heavily dependent on the Russian market in the 2000s, until Moscow imposed a slew of prohibitive economic sanctions, Krylov said.

"But for now, politics [rather than the economy] dominate their relations” Krylov said.