Putin: Why I backed West

Putin dellivers his mostly home-based address from the Kremlin

MOSCOW, Russia (CNN) -- President Vladimir Putin has been explaining to the Russian people why he joined the worldwide anti-terror coalition.

He used a televised "State of the Union" address, mainly focused on the Russian economy, to round on critics of his backing Western moves on Afghanistan.

Putin said Russia had encountered terrorists in the region "a long time ago" and the country had "no choice but to support efforts on the eradication of terrorism."

Calling Afghanistan "the den of international terrorists" he said that joint international efforts had managed to strike at the very centre of the terrorist threat and its infrastructure.

MORE STORIES Chechen blast kills 16

He said Moscow's cooperation had significantly improved the nation's stability on its volatile southern flank.

CNN's Jill Dougherty in Moscow said that Putin has been under fire in Russia for not having got anything in return for backing the anti-terror coalition.

However the main theme of his address, Dougherty said, looked at reviving the Russian economy by improving efficiency and reducing bureaucracy and corruption.

This he said was vital to make Russian business more competitive and reduce the gap with the West.

"We have to do this for ourselves. No one else will help us," he told lawmakers, Cabinet ministers and other dignitaries gathered in the Kremlin's 900-seat Marble Hall -- the same room where the Soviet Communist Party Central Committee used to pronounce its policies.

"We ourselves have to fight for our place in the economic sun," Putin said.

The speech -- very much aimed at a domestic audience -- focused on Russia's lagging administrative reforms, the need for the government to set more ambitious economic goals, and the population's dissatisfaction with its low standard of living.

Putin noted that the government had only begun to raise the standard of living for rank-and-file Russians, and that some 40 million Russians live in poverty.

He renewed his call for faster growth of the economy, and said it was necessary to uproot bureaucratic barriers.

"The reform should make the state machinery efficient, compact and workable," Putin said.

The Russian president said the economy's development was still hindered by often unnecessary red tape, which fuelled corruption.

Putin also spoke out forcefully against racial violence, following the highly publicised "war on foreigners" declared by Russian skinheads last week.

"The growth of extremism is a serious threat to stability and public security in the country," Putin said.

"We are referring first of all to those who under fascist and extremist slogans and symbols organise pogroms and beat people, while police and prosecutors' offices have no effective instruments to punish the organisers and instigators of such crimes."

"They act, in fact, like organised crime groups, and should be subject to the same prosecution," Putin said, adding that the government would soon introduce tough legislation to the parliament.

He also talked of stepping up links with the former Soviet republics.

"Work with the CIS is Russia's main foreign policy priority, allowing us, for one thing, to gain advantages on world markets ... through large-scale joint projects in infrastructure, transport and energy deliveries."

On Chechnya, Putin said the Chechen conflict was "considered to be over."

"It was completed by the courage and heroism of the Russian army and its special forces," he said, adding that "peaceful life is being disturbed by sallies of the rest of the bandits."

As he spoke it was revealed that two explosions had killed 16 pro-Moscow police in the now Russian-run republic.