Speaking at a military award ceremony in the Kremlin, Vladimir Putin said the global situation dictated the need to improve Russia's military structure.
"We cannot fail to notice the constant attempts to resolve international disputes by force, the threat of international conflicts, terrorism, the escalation of local conflicts and the spread of weapons of mass destruction," the president said
He said a considerable part of the funds will be allocated to buy state-of-the-art weapons and hardware, develop science and the defense industry.
"We are trying to integrate the defense industry with the civilian sector of the economy, primarily with the high tech sectors," the head of state said.
He set the top brass the task of focusing on combat training. "The Armed Forces once and for all must resume the [permanent] practice of large scale military exercises, missile launches and remote marine missions," Putin said.
He stressed that Russia consistently promoted the creation of a global security system.
"Our country is open to dialogue and cooperation with all those interested in forming effective international legal mechanisms to maintain global stability," the president said.
The president said in this very hall several years earlier discussions were held with the Americans on their abandoning the Anti-Ballistic Missile Treaty.
"Without going into details, I will say that our negotiations were further discussed by the Americans with their allies," Putin said. "One of the few amiable partners in the U.S., Colin Powell [the Secretary of State at the time], told Europeans: Why argue? What anti-missile defense are you talking about and where? They have nothing left, no missiles, only rust. This is just a theoretical argument."
Russia, which has long been anxious about the opening of NATO bases in former Communist-bloc countries and ex-Soviet republics, strongly criticized recent U.S. plans to deploy an anti-ballistic missile system in Central Europe as a national security threat and a destabilizing factor for Europe.
Washington continues to insist that the proposed deployment of missile defense elements in Poland and the Czech Republic are intended to counter possible strikes from North Korea and Iran, which are involved in long-running disputes with the international community over their nuclear programs.
The U.S. aroused further security concerns in Russia last week when a senior Pentagon official said Washington would like to station a radar base in the Caucasus and Ukraine.
The president also said that ensuring social guarantees for servicemen was an urgent task. He said service pay must be given particular attention, and problems with personal housing for servicemen must be solved by 2010.
