In his address the President put in the first place the problems of demography and social development of present-day Russia. Among priority tasks he highlighted modernization of the Russian army, stressing that in absolute figures Russia's defense spending is lower as yet than that of other states possessing nuclear weapons.
"We must fully realize that it is the leading world powers possessing nuclear weapons and powerful levers of military-political influence who will bear the brunt of responsibility for countering the threats and ensuring global stability. That is why the issue of modernizing the Russian army is of vital importance, and it really worries Russian society", said the Russian leader. "We must maintain the combat readiness of the armed forces", he stressed.
V. Putin noted that Russia's defense spending in relation to the Gross Domestic Product is about as high as that of such nuclear powers as France or Great Britain. However, in absolute figures it is twice less. In the US the defense spending is 25 times higher than in Russia. "Their house is their castle. Good work. Nothing to say", admitted V. Putin, and added: "We should also build our house to be solid and safe".
At the end of this section of his annual address the Russian President expressed confidence that the Russian people would definitely ensure their country's security.
"Today the situation in the army is changing. A modern structure of the armed forces has been created, and re-equipment of the army with new and modernized weaponry is underway, which will serve as a basis of armaments system up to 2020. Starting from this year, massive serial purchases of weapons and equipment for the Ministry of Defense have begun", said the President.
"Ship-building for the Navy has been reanimated, and we are building warships of practically all types. Shortly the Russian Navy will get two new nuclear-powered submarines carrying strategic weapons. They will be armed with "Bulava" nuclear missiles, which together with "Topol-M" complexes will form the basis for the strategic defense force. I would like to stress this point – these are the first nuclear-powered strategic submarines to be commissioned in new Russia. We have not built such submarines since 1990".
V. Putin added that Russia had five missile regiments equipped with silo-based "Topol-M" (SS-27) ballistic missiles, and that in 2006 the first regiment equipped with mobile "Topol-M" systems would be put on combat duty.
"Another important development of the recent years is the stepping up of combat and operational training of the troops. Dozens of field exercises and long-range naval cruises have been conducted, one of them has just ended", added V. Putin.
"The changes in the structure of the defense budget are also indicative. Defense spending is growing each year, with top priority being given to the qualitative growth of the armed forces. In the coming years we have to assure that the expenditure on development should come to no less than half of the military budget, while each budget ruble were used sparingly and purposefully", emphasized Vladimir Putin.