With the first-ever peaceful transfer of power through competitive and universally accepted elections, 2012 was a momentous year for Georgia.
And for this small and politically volatile South Caucasian nation of 4.7 million people, 2013 promises to be equally important.
When President Mikheil Saakashvili's United National Movement (ENM), the ruling party for nearly a decade, conceded defeat to billionaire Bidzina Ivanishvili's Georgian Dream after October's parliamentary elections, it marked a historic development for a country that had previously only changed rulers through civil war and revolution.
Tornike Sharashenidze, a Tbilisi-based political analyst, says that “the main thing that will be remembered in Georgia's history [from 2012] is the systemic breakthrough -- the holding of peaceful elections, [the result of which] was acceptable to all sides and which brought about a change of government.
“Regardless whether these results are good or bad in themselves, this happened, and it is a positive thing for everybody. This is the main achievement," Sharashenidze adds.
But the landmark election and transfer of power was just a first step, analysts say. As the new year approaches, several vital questions loom. Will Ivanishvili's government manage to successfully cohabitate with Saakashvili, who remains president until October 2013? Or will Georgia descend into the type of political chaos that plagued Ukraine after the 2004 Orange Revolution? How will the ENM adjust to being in the opposition? And will Georgian Dream succeed in strengthening the country's democratic institutions and in building a law-based state?
Political analyst Levan Tsutskiridze says the election campaign was “an extremely tense one, distinguished by a high level of confrontation and polarization. This, I think, once again illuminated the fact that Georgia's political system is still in need of significant development and sophistication. And on top of the system, the political culture and traditions in Georgia also need improvement."
Tsutskiridze adds that he is optimistic that the successful result of the elections themselves bodes well for the future development of the political system and culture.
The elections, however, left Georgia with an uneasy and entirely new cohabitation between Ivanishvili's Georgian Dream bloc, which controls the government and parliament, and Saakashvili's ENM, which -- in addition to controlling the presidency -- commands a strong faction in the new legislature.
Since Georgian Dream took over the government in October, a number of officials from the former government have been arrested on corruption charges and many others are under investigation. It remains unclear whether the cases represent political payback or if Georgian Dream is merely fulfilling its campaign pledges to crack down on corruption.
Thomas de Waal, a senior associate specializing in the Caucasus at the Carnegie Endowment in Washington, says the challenge now facing Georgian Dream stems directly from the incomplete reform legacy inherited from Saakashvili.
"The problematic legacy that I see that the Saakashvili government left behind is that it did a lot in modernizing Georgia in a very impressive way, but in quite a technocratic way,” De Waal says.
“It did build up good, functioning service institutions but very few institutions of law. The court system was still delivering a 99-percent guilty rate. The prison system was highly repressive and Georgia currently has the highest prison population per capita in Europe. So this was a system which was basically monopolized by the ruling party, which did many good things."
De Waal adds that a key issue for Georgia in 2013 will be to what extent the new government can build up the missing rule-of-law institutions.
"The current government has got some very good people, but they are kind of stumbling around a bit because they don't have much of an institutional legacy and they also have some very tempting instruments which they can use, such as this quite repressive legal system," De Waal says.
Shorena Shaverdashvili, editor in chief of the weekly magazine "Liberali," agrees that going forward it is essential that Georgian Dream's prosecutions be demonstrably fair, despite widespread public calls for revenge from those who claim they were victimized under the Saakashvili government.
Shaverdashvili adds that another source of danger is that the ENM is also learning how to be an opposition party. She argues the ENM's knee-jerk claims that all arrests and investigations are automatically politically motivated erode public confidence in the process and will damage the ENM in the long term.
If Georgian Dream and the ENM are unable to make their cohabitation work, Georgia could follow the path of Ukraine, which has seen many of the hopes of its 2004 Orange Revolution dissolve in the face of political gridlock and suspect criminal prosecutions.
"I would say things can move in two directions -- one positive and the other negative. The good way would be for all sides to accept the [roles and structures of] parliamentary democracy,” Sharashenidze says.
“The bad way would be to follow the route of Ukraine. Now, in comparison with Ukraine, fortunately or unfortunately, our country is a poorer one and is much more dependent on the Western aid. So the threat of us following Ukraine's route is not that imminent, even if for just this one reason."
Successful cohabitation is essential because, in addition to bolstering the country's legal institutions, Georgia's 2013 political agenda is long and daunting. Analyst Tsutskiridze lists the tasks of strengthening the political-party system, reforming local governance, improving the election law, conducting a free and fair presidential election in October, developing the economy and improving the investment climate, and improving national security.
On the last point, Tsutskiridze notes that the breakaway regions of Abkhazia and South Ossetia -- 20 percent of Georgia's territory -- have been occupied by Russia since the disastrous August 2008 war and that this agenda item cannot be put on the back burner while domestic reforms are carried out.
"Considering Georgia's general situation, it is of course not possible to avoid the issues of national security. It is of vital importance to continue and, moreover, improve the policy of developing closer ties and integrating with the United States, the EU, and NATO," Tsutskiridze says.
RFE/RL Georgian Service correspondent Salome Asatiani contributed to this report