Putin's comments reinforced his commitment to an expensive program to modernize the armed forces, which the Finance Ministry has signaled will be excluded from any budget cuts forced on the government by a growing economic crisis.

"We will continue to strengthen our armed forces and military organizations as a whole by making them modern, mobile, well-equipped and capable of performing their main task - to neutralize risks and political, potential threats to the security of our country," Putin told a meeting of Russia's industry commission.

Putin identified no specific threats but Russia's new military doctrine says NATO expansion is a threat.

Putin has also accused the United States of trying to subjugate Russia, has blamed the West for the overthrow of a Moscow-backed president in Ukraine last year and has said Washington stoked protests against him three years ago.

"We see how other countries are open about their geopolitical claims, and do not hesitate to interfere openly in the affairs of independent states while actively expanding and improving their military arsenals," Putin said.

"They spend many times more than we spend (on arms). We can and must respond to this challenge," he said.

(Reporting by Darya Korsunskaya, Writing by Thomas Grove, Editing by Timothy Heritage)

Meeting of the Military-Industrial Commission

President Of Russia Vladimir Putin

Good afternoon, colleagues.

At this meeting of the Military-Industrial Commission we will consider a number of key matters pertaining to Russia’s defence and security, and priority goals both for the short and long term.

I would like to begin by telling you that I have signed Executive Order On the Chief Designer of Armaments, Military and Special Equipment. As you may remember, back on September 10, 2014, we spoke of the need to draft such a document. It has been drafted and is now signed.

The chief designers will spearhead efforts to create strategically important munitions systems and will receive broad authority in terms of obtaining the resources for the projects. We expect to have no more than 20 such designers. The Military-Industrial Commission Board will carefully consider each candidate, and then they will be approved at a Commission meeting. This significantly raises both the status and the personal responsibility of the chief designer. I expect this to improve efficiency in the implementation of key national defence and security projects.

Let us now go over certain key issues that we will discuss today. First, let us consider the funding and resources for the new State Armament Programme until 2025, which we are to approve this year.

I noted in my Address to the Federal Assembly that we do not intend to get involved in an expensive arms race.  Russia does not threaten anyone and we try to resolve all disputes by means of negotiations. We will continue to follow this policy in the future as well.

At the same time, we see other states openly making their geopolitical claims, not stopping short of open interference in the affairs of independent states, at the same time actively building up and modernising their military arsenals. Under the circumstances, it is our duty to ensure the reliable protection of Russia’s sovereignty, territorial integrity and national interests.

You all know what I mean when I say that many or some states are conducting a different policy, namely that of pressure with the use of force. We have all been observing this for an extended period of time. It is all done to the accompaniment of talk about international law, about a desire to resolve disputes by means of negotiations. However, in these matters, as we all know – as a politician of the past once said – it is the potential that matters rather than the intentions. We can see the potential growing.

I have already quoted some figures illustrating the funding allocated by Russia and by other countries for military needs. These are absolutely incomparable numbers. They spend several times more than we do. However, I would like to repeat that we can and should respond to this challenge, but without, as I have said, getting involved in a costly arms race. Can we do it? Of course, we can. The focus should be on high technologies.

We will continue to strengthen our Armed Forces and the military organisation as a whole and to do everything possible to ensure that our Armed Forces are up-to-date, mobile and well equipped, capable of performing their main duty – that of neutralising risks and potential political threats to this country’s security.

Our plans should certainly be realistic. As before, we have to take full stock of the financial and economic capabilities of the state and of the circumstances we are in, the state of our economy and the world economy. Obviously, we cannot make any defence and security plans without a serious analysis of the situation in this area. Therefore, today we will discuss the macroeconomic forecast as the basis for the draft State Armament Programme until 2025.

I would like to draw your attention here to at least two key issues. First, we must ensure continuity in the new State Armament Programme in respect to the current State Armament Programme for 2011-2020.

Second, the new draft Programme should take into consideration Russia’s Military Doctrine, approved on December 25 of last year, which specifies the military threats to this country’s security. The development, production and deliveries of new armaments and equipment should be prioritised in line with this very important strategic planning document.

The second major item is the activity of the Advanced Research Foundation in 2014. As you may remember, at our meeting in Tula a year ago we said the Foundation should become a sort of ‘technological lift’ for defence innovations; it should stimulate breakthrough, revolutionary research rather than engage in studies in areas that may be new, but have already been exhausted. This, by the way, is the only way we can ensure, as I have just said, this country’s defence capability and security without getting involved in an arms race. This Foundation is called upon to assist in the fastest possible implementation of new studies.

I would like to note that in the past year the Foundation has launched work on a range of important projects. This includes the creation of technologies and armaments that are unmatched in the world. We have actually begun creating the key elements of new armament systems and innovative production technologies. We saw some of them today at the specialised exhibition.

The Foundation should continue work on these priority areas. We know that today the Foundation Supervisory Board approved 49 projects, with 26 of them already in the implementation stage.

I would like to stress that the Foundation’s funding has to be increased this year. We will also touch upon this today. In any case, everything I have seen today shows that our colleagues are on the right track and are moving ahead towards their goals. There are some very interesting and promising studies. It sometimes seemed as though we were watching a sci-fi film.

In 2015, the Foundation should focus on expediting the development of breakthrough industrial technologies that should correspond to the new sixth technological mode. Such technologies will determine the image of our military industrial complex of tomorrow and will ensure the serial output of armaments and military equipment of a new generation. I would like Mr Rogozin [Deputy Prime Minister, Deputy Chairman of the Military-Industrial Commission, President of the Advanced Research Foundation Supervisory Board] to pay special attention to such technologies in the planned adjustment of the Foundation’s activity plan.

Let us now proceed to the matters at hand.