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Delivering his annual state of the nation speech to legislators, Kremlin officials and other leaders on Thursday, Putin said the sanctions are not just a reaction of the U.S. and its allies over Russia's response to the events and a coup in Ukraine.
"I am certain that if all this did not take place ... they would come up with another reason to contain Russia's growing capabilities, to influence it or, even better, use it for its own goals," the Russian leader said.
Events in Ukraine
Putin said the Euromaidan revolution in Ukraine, that ousted Russia-backed President Viktor Yanukovich in February, was an armed coup supported by the West that justified Russian intervention.
"What we are seeing now in Ukraine, the tragedy in the southeast, fully confirms that our position is right," Putin said.
Fighting this year between Ukrainian forces and pro-Russian rebels has killed more than 4,300 people.
He also referred to Crimea as Russia's spiritual ground, calling the region "the same as Temple Mount in Jerusalem for those who confess Islam and Judaism."
Putin spoke after a rare and deadly rebel attack in the Chechen capital, Grozny. He said such acts of separatism are being supported by the West.
He said although Moscow has been treating its former Cold War enemies as close friends and almost allies, the support for separatism in Russia is coming from abroad, including political and financial help from spy agencies.
Blame as a distraction
Human Rights Watch Director Kenneth Roth said Putin is focusing blame on foreigners to distract Russians from problems at home.
“I think part of Putin's effort to blame the West, to blame others, is an effort to deflect criticism from himself," Roth told VOA.
"Why is Russia having economic problems today? Well, it has an unaccountable government that has led to the kind of adventurism that we see in Ukraine, which in turn has caused the West to respond," he added. "So, rather than Putin blaming himself, rather than blaming the kind of government that emerges where you suppress criticism, Putin is going to blame everybody else.”
Russia's economic situation has unraveled since the United States and the European Union imposed a series of increasingly harsh economic sanctions on Moscow over its annexation of Crimea and what they see as support for separatist rebels in eastern Ukraine.
But, as some analysts believe, it's not so much the sanctions that are bringing Russia to its knees.
"The West makes too much about the sanctions. They are pinching, but [Putin] and colleagues are more concerned about the steep drop in oil prices. Oil is an essential element of Russia's earnings... there is more hurt here," Thomas Graham, managing director at Kissinger Associates, Inc. and former top National Security Council official in the Bush administration, told VOA.
Russian finance officials this week revised their economic forecast for 2015 from slight growth to recession. The Russian currency has dropped to its lowest value in a quarter century. Foreign capital is also fleeing the country.
Open to cooperation
However, despite the anti-Western rhetoric, Putin said Russia would seek cooperation with Europe and the United States.
He said Russia will never pursue the path of self-isolation, xenophobia, suspicion or searching for enemies. All this is a manifestation of weakness, he said, while Russia is strong and self-confident.
Meanwhile, U.S. Secretary of State John Kerry said Russia had pitched itself into isolation through its own actions in Ukraine and could rebuild international credibility only by ending its support for pro-Russian separatists.
Speaking at a meeting of foreign ministers from the Organization for Security and Cooperation (OSCE), Kerry said on Thursday that Moscow had failed to live up to its commitments under September Minsk cease-fire accords to end the conflict in Ukraine.
"It is not our design or desire that we see a Russia that is isolated through its own actions," he said at the meeting in Basel, Switzerland.
"In fact we are convinced that Moscow could rebuild trust and relationships if it simply helps to calm turbulent waters, if it takes steps now to implement the Minsk Protocol," Kerry added.
Weakened ruble
The ruble saw a gain in the morning when Putin began elaborating pro-business reforms, including an amnesty on capital returning to Russia, a freeze on higher taxes, and an easing of regulations for small businesses. However, investors were unimpressed by the promised reforms and the ruble weakened later in the day.
The ruble has declined by 60 percent against the dollar since the start of the year, and is down by some 45 percent against the euro. On Monday, it suffered its biggest one-day fall since the 1998 financial meltdown after oil prices sank further.
In his speech, Putin said the country's National Wealth Fund should be used for supporting domestic banks. “We have a large amount of internal savings, they should become effective investments,” he told members of parliament and other top Kremlin officials on Thursday.
He also said as of November 1, the fund, which aims to cover future pension shortages, stood at $81.7 billion. He suggested using the reserves "for lending to the most important projects in the real sector of economy.”
Crackdown on dissent
Human Rights Watch's Roth, who was on his first trip to Russia in a decade, said the crackdown on dissent is the worst since the Soviet era. He cited suppression of opposition voices, laws limiting protests, and state take-overs of independent media, among other steps to control critics.
“I think it is political insecurity that lies behind all of this. And, I fear that this is only going to intensity as Russia now encounters some real economic problems as a consequence of Putin's adventurism in Ukraine," Roth said.
According to former Bush administration official Graham, Putin is in it for the long haul.
"If you look at what Putin has been saying, he believes he can outlast the West.... His goal is to tough it out in the hope that Europe will crack before things inside Russia crack," said Graham.
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