MOSCOW, Feb 8 (Reuters) – President Vladimir Putin said on Friday a new global arms race was starting and Russia was “forced to retaliate” with new, high-tech weapons.

In a tough speech outlining his vision for Russia to 2020, Putin accused the West of ignoring Moscow’s concerns on security by expanding the NATO military alliance to its borders and deploying a missile defence system in Central Europe.

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I had expected to find Vladimir Putin cold, sinister and aggressive.

Waiting to meet the Russian President at the Valdai discussion club, an annual meeting of academics and journalists who specialise in Russia, I recalled the tasteless pictures of him published this summer, showing him bare-chested and wearing a gold chain on a fishing trip to Siberia.

Putin seemed a vain macho-man, more concerned with his physique than his dignity, a powerful and ruthless leader in charge of an increasingly belligerent and heavily armed state.

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Controversial: Putin has turned Russia into an economic powerhouse

Yet as soon as he entered the room, he seemed to be the opposite of his caricature.

He smiled a lot, his body language was relaxed and informal, his eyes were soft and his speech quiet.

In fact, as he answered questions for three hours, Putin generated no aura of anger or intimidation.

He has an amazing command of facts and spoke without notes or prompts.

He could even make the whole room laugh. When asked a hostile question about nepotism in Russian companies, he replied with an old Soviet joke. ‘Can a general’s son become a general? Of course. But can a general’s son become a field marshal? Of course not – field marshals have their own sons!’

His manner was professional and non-confrontational. I admired the clarity and fluency with which he presented his ideas.

Sure, there were occasions when he spoke directly. ‘We don’t interfere in your politics, so please don’t interfere in ours,’ he told one American.

And he expressed exasperation that the West protested when Russia started to charge market prices for gas exports to Ukraine in 2005.

‘If you support an anti-Russian president in Ukraine, you will have to pay for it. What do you take us for, a bunch of idiots?’

But, as Putin prepares to leave office next March (the Russian constitution does not allow him to run for a third term), the main thing you notice about him now is his evident satisfaction at a job well done.

When Putin was plucked from obscurity to become Prime Minister in 1999 (he was elected president the following March) Russia was an impoverished gangster state.

Boris Yeltsin’s disastrous ‘shock therapy’ was all shock and no therapy: it plunged millions of Russians into economic misery and early death while inflation and the 1998 collapse of the rouble wiped out what few savings remained.

Russia was heavily in debt to the IMF. Nato’s 1999 attack on Yugoslavia, which Russia had been powerless to prevent, symbolised the international humiliation of a once-great nation.

Eight years later, Russia has seven per cent growth and an astonishing £300billion in foreign-exchange reserves.

The country is pouring billions into its infrastructure, space and nanotechnology, while Russian companies are snapping up firms all over Europe and America.

The construction industry is growing so fast – 50 per cent a year at the last count – that it is almost impossible to transport the required amounts of concrete.

In 2006, Russia bought twice as many cars as India, whose population is over five times larger.

Many cities now have dreadful traffic jams to prove it.

You also see more ordinary Russians on holiday in Europe than Americans.

Nice restaurants have opened in provincial cities which used to be regarded as post-Soviet hellholes.

Under Yeltsin, a tiny criminal elite of oligarchs stole vast fortunes while the population starved. Under Putin, the worst oligarchs have been imprisoned for fraud or sent into exile.

But far from being a frightening throwback to the worst days of the Cold War, Putin is typical of the new political class which has governed Russia for the past eight years.

Many of his most senior ministers are highly professional and non-ideological managers of Russia’s corporations.

Putin told us he sees himself as a social democrat, combining sensible economic management with social policies designed to protect the vulnerable.

But he also has a romantic side and a deep sense of Russian history.

‘You know what I found out recently?’ he asked.

‘My family has been living in the same village and going to the same church for 400 years. It’s very interesting. I’ve been to look at the church records.’

As we left our formal meeting in the Black Sea resort of Sochi, Putin invited us for drinks on the terrace of his presidential villa.

The breakers crashed on the shore below and the sky was filled with pink light as the sun went down over the sea.

As he chatted with us in small groups, one could sense his satisfaction that he is soon to ride off into the political sunset on such a high note.

His political career resembles the plot of a spaghetti Western – an unknown man who arrives in a Wild West town, cleans the place up, and then trots off again, his task accomplished.

Given this record, it is incredible that the West’s relations with Russia during Putin’s presidency have deteriorated.

We attack Russia for being authoritarian but we cultivate a close relationship with communist China.

We preach the rule of law and then demand that the Russians break their own laws and extradite the man suspected of killing Alexander Litvinenko in London (Russian law does not allow its citizens to be extradited to other countries).

We listen to exiled oligarchs in this country as if they were human-rights activists, whereas many Russians think they are thieves and killers.

Russia wanted to be an ally of the West in the war on terror, but when Chechen terrorists murdered nearly 200 schoolchildren in Beslan in 2004, the Western media attacked Putin for the carnage and demanded he seek a political solution with the Chechens.

When Russia disbanded the Warsaw Pact, the West responded by extending the borders of Nato to within a few moment’s flight of St Petersburg.

This is a massive strategic mistake for which British oil companies and investment houses may pay dearly.

It will only drive Russia further into the arms of China, the other rising giant in the world economy.

The Russians are rich, powerful, successful, intelligent – and they want to co-operate with the West.

We are driving them away. ‘You in Europe and the US, you need to be more patient with Russia and stop finding faults with us all the time,’ said Putin.

Then, smiling, and waving goodbye, he walked smartly out of the room – as if on his way back to work.