In his latest address to the State Council, Russia's President Vladimir Putin condemned NATO’s failure to accommodate his country’s concerns and also criticized the organization’s plans to expand as well as United States’ plan to include Poland and the Czech Republic in a missile defense shield.

"It is already clear that a new phase in the arms race is unfolding in the world," Mr. Putin said.

After bringing such a delicate issue to the table during his speech on his strategy for the development of the country until 2020, Putin went on and explained that most of the countries are currently spending way more than Russian on developing new weapons.

However, Putin assured the members of the Russian parliament that their country will face the challenges of a new arms race by developing more hi-tech weaponry.

As for NATO’s recent activities in Central and Eastern Europe, Russia’s president said "there are many discussions on these, but... we have still not seen any real steps towards finding a compromise".

"In effect, we are forced to retaliate, to take corresponding decisions. Russia has, and always will have, responses to these new challenges," he said.

In December, Putin has said that Russia was planning to carry out several naval exercises in the Mediterranean Sea and the Atlantic Ocean. The Russian military has also resumed long-range patrols by its bomber aircraft.

The bomber long-range patrols were suspended after the collapse of the Soviet Union, but recommenced in August 2007 together with a change of direction in President Putin’s foreign policy.

The big increase of oil prices made it possible for Russia to boost investments in its armed forces. However, its military capabilities remain far below what they were during the Soviet era.

Putin will leave office in May after Russia holds its presidential elections on March 2. Putin can’t run, as he already served the maximum two terms permitted by the constitution, but his protégée Dmitry Medvedev will most certainly be the next president follow Putin’s policies.