Putin praises economic surge but says it has left many Russians behind

President Vladimir Putin on Thursday rejected Western criticism he is using his energy policies as a weapon, denounced the deployment of U.S. anti-missile systems in Eastern Europe and said he didn't believe in conspiracy theories when asked about the radiation poisoning death of a former Russian KGB officer.

Addressing some 1,200 reporters at his annual news conference, the Russian president rejected allegations in the West that price disputes with Ukraine and Belarus which triggered interruptions of Russian oil and gas deliveries to Western Europe amounted to using Russia's vast energy reserves to achieve political aims.

"The thesis is being thrust on us all the time that Russia is using its old and new economic efforts to attain foreign political goals. It is not so," Putin said. The price increases, he said, are driven simply by Russia's desire to get fair prices for its gas and oil after years of providing energy at below-market prices to former Soviet neighbors.

"We're not obliged to subsidize the economies of other countries," Putin said. "Nobody does that, so why are they demanding it of us?"

Putin uses the annual news conference, televised live on two nationwide state-run channels, to burnish his image domestically as a competent, caring president in control of a resurgent country with a growing economy and global clout.

Outside of Russia, there are other concerns. Moscow's international reputation has been battered by the killings late last year of two critics: investigative journalist Anna Politkovskaya in Moscow and former security agent Alexander Litvinenko, in London, who blamed Putin for his radiation poisoning in a deathbed statement.

Russian officials have claimed, without citing evidence, that the killings were committed as part of a plot to discredit the Kremlin.

"Openly speaking, I don't believe in the conspiracy thesis," Putin said. He declined to speculate how Litvinenko came to swallow the rare radioactive poison that killed him. "Only the investigation can answer that," he said.

He also said that Litvinenko had no access to state secrets during his time as an officer in the Federal Security Service, one of the successor agencies to the KGB.

Putin rejected Washington's claim that possible deployment of U.S. missile defense sites in central Europe was intended to counter threats posed by Iran and warned that Russia would take countermeasures.

U.S. officials have said that proposed missile defense sites in Poland and the Czech Republic would be designed to intercept a missile attack by Iran on Eastern Europe, and would not affect Russia's security.

But Putin said the Kremlin did not trust that claim.

"Our military experts don't believe that the missile defense systems to be deployed in eastern Europe are intended to counter the threat from Iran or some terrorists," Putin said, adding that Iran does not currently have missiles capable of reaching Europe.

"We consider such claims unfounded, and, naturally, that directly concerns us and will cause a relevant reaction. That reaction will be asymmetrical, but it will be highly efficient," Putin said.

Putin said that Russia's latest Topol-M intercontinental ballistic missiles were capable of penetrating missile defenses and added that more-effective weapons systems are being developed.

"We will have next-generation systems immune to any prospective missile defense," Putin said. While missile defense systems under development will only be capable of tackling ballistic missiles, he said, the new weapons will be capable of changing the altitude and direction of their flight on their way to target.

"Missile defense systems are helpless against that," Putin said.

Putin's second term ends in 2008, and the Russian constitution limits presidents to two terms in succession. Russian politics is dominated by talk of his successor.

The Kremlin is widely believed to be grooming two proteges: First Deputy Prime Minster Dmitry Medvedev and Defense Minister Sergei Ivanov. Open support from Putin who enjoys enormous popularity for either man would virtually ensure his election.

But Putin remained coy yesterday about whom he will support.

"There will not be a successor, there will be candidates for the presidency," Putin said, adding that the government must ensure a democratic campaign.

"I reserve the right to express my preference, but this will be done only in the pre-election period," Putin said.

At the start of the news conference, the Russian president praised his nation's remarkable economic comeback since the desperate days of the 1990s _ the gross domestic product, he said, grew at least 6.7 percent last year. And there is increased spending on education and public health. But he acknowledged the government has much to do to narrow the gap between rich and poor.

"But we still have to do very much in the social sphere, including resolving one of the main tasks that we have in this areathat is, reducing the gap between highly paid groups of the population and the citizens of our country who still live very, very humbly," Putin said in his opening statement, before taking the first questions from some 1,200 journalists, reports AP.

Russia's relations with the West are a perennial topic at the news conference, which gives foreign journalists a rare chance to directly ask a question of Putin and gives Putin a chance to portray Russia, as he often does, as a country under attack from ill-wishers abroad.

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