Saakashvili Concedes Defeat in Georgia Polls

Georgian President Mikheil Saakashvili conceded defeat Tuesday in parliamentary polls that handed a shock victory to an opposition coalition led by billionaire tycoon Bidzina Ivanishvili.

Although Saakashvili remains president, the defeat of his United National Movement to Ivanishvili's Georgian Dream coalition in Monday's elections spells the end of his nine years of largely unchallenged dominance over Georgia.

"It is clear that the (opposition) Georgian Dream has won a majority," Saakashvili said in a dramatic televised speech after elections hailed as an "important step" for democracy by international observers.

Without specifying the allocation of seats in the future parliament, he indicated that Georgian Dream would have the majority in the new assembly and would form the new government.

"We, as an opposition force, will fight for the future of our country," he said, promising to facilitate the transition process as president.

Georgian Dream was leading Saakashvili's United National Movement by 53.11 to 41.57 percent after 29 percent of electoral precincts declared results in the proportional ballot that will decide just over half of the parliamentary seats.

First-past-the-post votes in 73 constituencies will make up the remainder of the 150-seat parliament and the opposition was ahead in partial counts from seven out of 10 such constituencies in its stronghold Tbilisi.

Saakashvili said that although there were "deep differences" between his party and the opposition, "democracy works and the Georgian people take the decision and this is what we deeply respect".

His campaign was undermined by a prison torture scandal that prompted nationwide protests ahead of the vote in the Western-backed ex-Soviet state and raised fears of more serious post-poll unrest.

OSCE election observers described the polls as an "important step in consolidating the conduct of democratic elections."

"Despite a very polarizing campaign that included harsh rhetoric and shortcomings, the Georgian people have freely expressed their will at the ballot box," said Tonino Picula, the head of the OSCE international observer mission.

Ivanishvili had declared victory immediately after several exit polls suggested late Monday that his coalition was ahead and his supporters celebrated long into the night in Tbilisi's central Freedom Square.

Ivanishvili's victory upsets the dominance Saakashvili has built up over the country of 4.5 million since he rose to power after the 2003 "Rose Revolution", and risk making him a lame duck until his term ends in 2013.

The elections were crucial for Georgia's future because its parliament and prime minister will become stronger and the presidency's powers will dwindle under constitutional changes that come into force after Saakashvili's two-term rule ends.

Turnout was 61 percent, the Central Election Commission said.

"The elections were held in an unprecedentedly competitive environment and the final result will accurately reflect the people’s will," the commission's chief Zurab Kharatishvili said in a statement.

Saakashvili's party, which controlled 119 of the 150 seats in the outgoing parliament, has dominated Georgia since the charismatic lawyer rose to power after the Rose Revolution that ousted the country's former leader, ex-Soviet foreign minister Eduard Shevardnadze.

He was praised for modernizing reforms that brought Georgia back from the brink of economic collapse and tackled widespread corruption but drew criticism for crackdowns on protesters and the country's disastrous defeat in a brief war with arch-foe Russia in 2008.