Rising tension with Russia and domestically within cohabitation govt. Relations worsened with Russia over its demarcation of Administrative Boundary Line (ABL) separating Georgian-controlled areas from South Ossetia (SO). Georgiaclaimed Russia “annexing” territory by installing fences deeper into areas previously under Georgian control. Russian “borderguards” also detained further Georgian citizens near ABL. Georgian FM expressed concern, delivered protest note to Russia through Swiss Embassy. Georgian Patriarch Ilia II 1 June appealed to President Putin; European Union Monitoring Mission and NATO also condemned “borderisation” by Russian troops. Putin in 11 June interview said Moscow willing to restore relations with Georgia “in full scale” and called for cooperation combating crime and terrorism, but “cannot imagine” reversal of recognition of Abkhazia and SO. Russian-Georgian envoys met again 5 June to discuss trade, economy issues with limited results. Rising tensions within cohabitation govt ahead of Oct presidential elections as Interior Ministry 16 June claimed to have found large arms cache in west, videos depicting torture and rape of 2 detainees by police in 2011; several people including 3 acting, 1 former law enforcement officers arrested. Govt said it showed “systemic nature” of abuses under President Saakashvili’s UNM party, which condemned violence in tapes while saying they were “planted” among arms, which were purposefully hidden after 2008 war with Russia. Pro-Saakashvili Tbilisi city officials arrested and charged over alleged corruption; NATO chief Rasmussen, visiting Tbilisi 27 June, expressed concern over developments in Georgia. PM Ivanishvili hinted he may quit politics after Oct presidential vote. Revelations came as speculation mounted that Ivanishvili govt may arrest Saakashvili. Deaths of 7 Georgian NATO troops in Afghanistan in targeted suicide bomb  further fuelled domestic political tensions. 

Deputy interior minister arrested on blackmail allegations; agriculture minister temporarily stepped down over corruption investigation involving senior ministry officials; former PM Vano Merabishvili and former health minister Zurab Chiaberashvili, both senior allies of President Saakashvili, arrested for corruption. Prosecutor General late month said Saakashvili may also be questioned over alleged misuse of state funds. Saakashvili criticised reported govt statements on possible resumption of Russian gas imports, citing need for independence from Russia. FM criticised Russian installation of barbed-wire fencing along administrative boundary around breakaway region South Ossetia; countries set to discuss early June. Russian troops 30 May reportedly detained Georgian national near administrative boundary. National Olympic Committee agreed that Georgian athletes will participate in Sochi 2014 Winter Olympics in Russia. Govt announced creation of special investigative group to look into Aug 2008 war with Russia and “possible criminal activities during and after”.

Russian FM Lavrov in media interview 11 April welcomed pragmatism on part of Georgian PM Ivanishvili, said Moscow ready to expand ties with Tbilisi, but its recognition of independence of Abkhazia and South Ossetia is irreversible. Several thousand supporters of President Saakashvili rallied in Tbilisi 19 April. 27 April by-elections to fill 3 vacant parliamentary seats all won by Georgian Dream candidates.

Continued tensions with Russia despite rhetoric of rapprochement. Officials met for 2nd round of talks on normalization 1 March, however Russian President Putin 12 March met with Abkhazian de facto president Aleksandre Ankvab in Moscow to discuss cooperation, prompting criticism from Georgian FM Panjikidze. Parliament 7 March adopted resolution reaffirming country’s commitment to Euro-Atlantic foreign policy. Parliament 21 March approved motion removing president’s authority to dismiss govt and parliament. Georgia and U.S. held joint military exercise prompting Russian criticism; Tbilisi expressed “grave concern” over snap Russian military exercises in Black Sea late month. Latest round of Geneva talks with Russia late month reportedly ended inconclusively.

Political tensions heightened early Feb when ruling Georgian Dream (GD)-dominated parliament 7 Feb postponed President Saakashvili’s annual address to MPs. Saakashvili next day tried to give speech at national library, however some 300 protesters, including some individuals recently released as political prisoners, appeared to block entrance, some assaulted opposition MPs. PM Ivanishvili and Saakashvili  both issued conciliatory statements following clashes; parties came together to discuss constitutional amendments proposed by GD restricting president’s ability to effect change of govt without parliamentary approval, and opposition United National Movement (UNM) proposal to enshrine pro-Western foreign policy in constitution. Negotiators 20 Feb announced parties reached agreement, but implementation not possible due to disagreement on amnesty for public servants, proposed by UNM. Tbilisi mayor Gigi Ugulava charged with money laundering and misspending public funds; denies charges. Second meeting between Georgian and Russian officials on normalising relations scheduled 1 March.

Georgian Orthodox Church Patriarch Ilia II visited Moscow 22-24 Jan, met with Russian President Putin; groups of Georgian entrepreneurs also visited Moscow to discuss economic relations. Defence minister Irakli Alasania relieved of his position as first deputy PM by PM Ivanishvili due to leaked internal discussion regarding his possible candidacy for position of president. Scandal broke after prosecutors announced high-ranking officials from previous govt had systematically blackmailed public figures after filming them engaged in homosexual activities; Saakashvili denied knowledge or involvement. 190 prisoners released as part of 13 Jan amnesty after being recognised as political prisoners by parliament Dec 2012.

Detentions and questionings of former middle- and high-ranking officials continued: former PM Merabishvili taken for questioning 1 Dec for using fake passport travelling to Armenia; 2 former ministers, several others arrested and released on bail later in month in corruption investigation. NATO SG Fogh Rasmussen 5 Dec indicated he was content with reassurances from new govt over arrests. Sharp spike in popularity ratings for Ivanishvili and Georgian Dream coalition since elections. Significant steps towards Georgia-Russia rapprochement, culminating in 14 Dec meeting in Geneva between Russian Deputy FM Grigory Karasin and Georgian PM’s Special Representative for relations with Russia Zurab Abashidze. Abashidze said meeting envisaged creating new channel of communication and political dialogue; sides agreed to continue direct talks without assistance of international mediators. Talks to focus on trade and humanitarian areas of cooperation, Russia’s recognition of South Ossetia and Abkhazia on back burner.

Despite agreement by new PM Ivanishvili and President Saakashvili to work together, signs of cracks emerging over budget and arrests of former govt officials. Tensions between ruling Georgian Dream coalition and President’s office ignited by dispute over 2013 State Budget, drafted 6 Nov, which saw funding for President’s Administration, National Security Council and Tbilisi municipality slashed. Saakashvili’s UNM slammed funding cuts as “politically motivated”. Arrest of former Interior Minister Bacho Akhalaia on charges of exceeding official powers and torture marked beginning of string of detentions of former interior ministry officials on charges of illegal confinement, illegal surveillance, damage of property, exceeding official powers. Govt responded to international, domestic concerns by promising to observe due process; Ivanishvili said he would not insist on impeachment of president, but his Georgian Dream parliamentary majority will initiate early adoption of constitutional changes set to significantly cut presidential powers. Ivanishvili 22 Nov said govt intends to establish relations with Abkhazia and South Ossetia; also said ready to meet Russian officials, though would not visit Russia. New govt appointed Zurab Abashidze as special envoy to Georgian-Russian affairs; Abashidze proposed “new, independent” format for Moscow-Tbilisi talks. Reports that Russian embargo on Georgian wine, water may be lifted.

Georgian Dream (GD) coalition led by billionaire Bidzina Ivanishvili claimed victory in 1 Oct parliamentary elections; polls hailed as historic, marking first democratic transfer of power since independence. GD claimed 55% of vote; President Saakashvili’s United National Movement (UNM), in power since 2003 Rose revolution, gained 40%. GD to occupy 85 of 150 seats in parliament, UNM 65. Saakashvili conceded defeat 2 Oct. International observers praised peaceful conduct of elections. New PM Ivanishvili initially called for Saakashvili, whose term ends Oct 2013, to resign immediately, then rescinded, said ready for dialogue. Parliament 25 Oct approved new cabinet, comprised mostly of technocrats. Ivanishvili 24 Oct said will quit politics in 18 months. New Minister for Reintegration Paata Zakareishvili outlined new strategy for conflict regions, including direct negotiations with de facto authorities. Policy of not discussing recognition of breakaway regions to continue. Abkhaz authorities issued report alleging Georgian involvement in “terrorist acts” aimed at destabilising Gali region in 2012, denied by Tbilisi; independent investigations impossible as Abkhazia and Russia have evicted international organisations from region, refuse to allow EU monitors to enter entity or look into claims. Change in govt prompted discussions about relations with Russia, but new FM quickly ruled out resumption in ties while Moscow continues to recognize South Ossetia, Abkhazia. GD leaders stress Georgia’s pro-Western orientation and emphasis on Euro-Atlantic integration will continue, but improvement of ties with Russia still a goal. In statement welcomed by Moscow, Ivanishvili confirmed Georgia will take part in 2014 Sochi Olympics.

Ahead of crucial 1 Oct parliamentary elections, Georgia and Russia exchanged accusations that other side is engaged in military build-up around breakaway region South Ossetia (SO). EU Monitoring Mission 21 Sept issued statement saying no evi- dence of Georgian build-up but expressed concern over increased concentration of Russian forces along administrative boundary line (ABL); urged both sides to refrain from destabilising activities. SO authorities reported attack on “border post” near ABL 29 Sept, responded by detaining Georgian Interior Ministry official. Pre-election atmosphere tense: OSCE election observation mission warned that tone of campaigns of ruling United National Movement (UNM) and main opposition coalition Georgian Dream (GD) “confrontational and rough”; EU foreign policy chief Ashton and Neighbourhood Commissioner Füle also expressed concerns over tensions. NATO Sec Gen Rasmussen described vote as “litmus test” for Georgian democracy. U.S. and EU FM delegations visited Georgia to assess election environment. Political tensions escalated as opposition-run TV channels 18 Sept showed footage of abuse of prisoners in Tbilisi jail, sparking several days of protests in capital and other cities, international condemnation. Prisons minister, interior minister both resigned; several lower level officials detained; President Saakashvili demanded overhaul of prison system. Series of compromising videos aired by opposition- and govt-supported channels in attempt to discredit other side. Tens of thousands attended opposition rally in Tbilisi 29 Sept.