President Vladimir Putin accused the West of military expansion and laid out an ambitious agenda for his successor to restore Russia's economic and military clout in a farewell address Friday.

With less than a month before the presidential election, the speech signaled that Putin's doctrine of assertive economic and military policies and unwavering centralized power would continue under his chosen successor, First Deputy Prime Minister Dmitry Medvedev.

Medvedev is expected to win the March 2 vote easily, and he has indicated he will name Putin as his prime minister.

The West is skeptical of how free and fair the vote will be, and the election monitoring body of the Organization for Security and Cooperation in Europe said Thursday it would not send observers because of "severe restrictions" imposed by the Kremlin.

In his televised speech to government officials, cultural figures and religious leaders, Putin dismissed those concerns, saying that "attempts of foreign interference in the course of the political battles within Russia are not only immoral, but also illegal."

Putin spoke strongly against NATO's expansion into former Soviet bloc states of eastern Europe and said Moscow would respond by modernizing its military and weapons systems.

He said the West has failed to respond to Russia's security concerns about U.S. plans to deploy missile defense sites in Poland and the Czech Republic and new military bases in Romania and Bulgaria.

"We haven't seen any real steps toward compromise," Putin said.

He warned that a new arms race is under way. "It is not our fault because we did not start it," he said.

NATO defense ministers, meeting Friday in Vilnius, Lithuania, said there was no need for such heated rhetoric.

"I don't think it's fair to say we don't hear Russian concerns, and I might add that NATO countries want as much as possible to meet those concerns, but we have to, of course, take into account the interest and security of NATO countries as well," NATO spokesman James Appathurai said.

Washington says its plan to place 10 missile defense interceptors in Poland and a radar station in the neighboring Czech Republic is not aimed at Russia, but is part of a global system to protect against any missile attacks by Iran.

State Department spokesman Tom Casey said he had not seen Putin's comments. But he said the U.S. missile defense would be "a small and limited system, defensive in nature, and poses absolutely no threat to Russia's strategic interests."

Listing the domestic successes of his tenure, Putin noted the country's rising birth rate and growth of the middle class. He said the rule of law had been restored after what he described as the chaotic years of the 1990s following the collapse of the Soviet Union.

"One can say with confidence now that political lawlessness for the people of Russia has ended," he said.

And he returned to the issue that helped propel him to the presidency — terrorism in the North Caucasus and his decision in 1999, as prime minister, to order federal troops back into Chechnya, starting the second war to ravage the region in less than a decade.

He said Chechnya is on the road to recovery, and he warned of the danger of allowing separatist movements to develop.

"If we were to ever allow ourselves in the future to fall into this sort of partition, it would be endless and it would destroy the country," he said.

Putin also laid out a plan for the development of the country over the next 12 years.

He said Russia's economy is "extremely inefficient" and had harsh words for the government's bloated bureaucracy, which "significantly blocks and unmotivates the development of the country."

Russia should do more to encourage innovation and develop value-added manufacturing instead of relying solely on exports of its abundant natural resources, he said.