Billionaire PM cements grip in Georgia, ally elected president

Reuters

* Election ends Saakashvili's decade in power

* Governing coalition's candidate wins - exit polls

* Prime Minister Ivanishvili plans to step aside

By Margarita Antidze and Timothy Heritage

TBILISI, Oct 27 (Reuters) - A little-known ally ofbillionaire Prime Minister Bidzina Ivanishvili won a landslidevictory in Georgia's presidential election on Sunday, cementingthe ruling coalition's grip on power after Mikheil Saakashvili's10-year rule.

Georgy Margvelashvili's triumph concentrates power and willmake policy-making easier in the former Soviet republic becauseIvanishvili's Georgian Dream coalition now controls both thepresidency and the government for the first time.

Exit polls showed the margin of victory was so large thatthe candidate from Saakashvili's party, David Bakradze, concededvictory to Margvelashvili even before the official count began.

Georgian Dream supporters released dozens of balloons in thecoalition's blue and white colours outside its headquarters inthe capital Tbilisi, sounded car horns in the packed streets andchanted: "Long live Georgy".

"We have shown the world how free people make a freechoice," Margvelashvili, a 44-year-old former vice premier witha doctorate in philosophy, told cheering supporters.

He wrapped his arm around the shoulders of Ivanishvili, whoplucked him out of academia when Georgian Dream oustedSaakashvili's government at the polls a year ago, and praisedhim as the "biggest authority" in the South Caucasus country.

Margvelashvili had needed one vote over 50 percent of theballots cast to secure victory without a run-off. GfK, aEuropean market research group, put him on 66.1 percent and ACT,a Georgian research group, estimated he would win 68 percent.

But the election is likely to provide only a brief respitefrom political uncertainty in the country of 4.5 million whichis strategically important for both Russia and Europe, whichgets Caspian gas and oil via pipelines that go through Georgia.

PRIME MINISTER TO STEP ASIDE

Ivanishvili, Georgian Dream's founder and the most powerfuland richest man in Georgia with an estimated fortune of $5.3billion, says he will step aside soon because his job will becomplete when his 45-year-old rival leaves the presidency.

He has not said who will be the next prime minister - themost important job in Georgia under constitutional changes thatare about to go into affect - or how he might continue to bringinfluence to bear on the coalition from the sidelines.

The European Union is also worried by the arrest of severalformer ministers and other officials, including a former primeminister, and that Saakashvili could suffer the same fate.

Georgians are openly speculating that Saakashvili might soonleave the country to avoid prosecution.

He went on television soon after voting ended to say he wasworried about Georgia's immediate future. But, echoing hisdecision to quickly concede victory to Georgian Dream after lastyear's parliamentary election to ease tension, he sought calm.

"I think the events of the past year and today, and theresults today, are a serious setback for Georgia and itsfuture," he said. "But at the same time I am sure the darkforces will not be able to get any stronger and that Georgia hasa good future."

Poverty remains a problem and, after years of robust growth,gross domestic product grew 1.5 percent in the second quarterthis year, down from 8.2 percent in the same period a year ago.

Margvelashvili owes his rise to Ivanishvili's patronage andhis lack of political experience may have helped him in acountry where voters are weary of squabbling among politicians.

"He is a new type of politician, a new generation," GogiPopkhadze, 35 and unemployed, said as he voted forMargvelashvili in bright sunshine in Tbilisi.

Margvelashvili's main foreign policy goal is to pursue closeties with both the West and Russia, a balance that has longeluded Georgia.

Saakashvili strengthened democracy and launched economicreforms after coming to power following the bloodless "roserevolution" in 2003 that ousted Eduard Shevardnadze.

He strengthened ties with Washington and became a Westerndarling but lost a brief war to Russia in 2008 over two rebel Georgian regions and failed to reform the justice system.

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