NICOSIA -- Saudi Arabia and Qatar's decisions to privatize key sectors in a bid to liberalize their economies and attract more foreign investment dominated economic news in the Middle East this week.

Saudi Arabia's Finance Minister Ibrahim al-Assaf announced this week an ambitious plan to privatize 20 vital sectors to help reduce pressure on the state budget and pay off the huge public debt.

Under the plan, state utilities and public services, including certain health, municipal and social services, will be privatized, a step expected to generate tens of billions of dollars.

Government stakes in Saudi shareholding companies, including Saudi Basic Industries Corp. (SABIC), Saudi Electricity Co. and banks will be sold off.

The Saudi budget is faced with a chronic deficit.

In the past two decades it has only once finished in the black: in 2000 due to high oil prices.

The minister said that revenues generated from the sell-off plan will be used to pay for the entirely domestic public debt, which reached a staggering $168 billion at the end of last year.

The private sector contributes slightly less than 50 percent to GDP in the kingdom where the economy is heavily dependent on oil.

Qatar's Sheikh Hamad said the small emirate was selling off part of the petrochemical industries sector to private investors in 2003, in a move aimed to boost the role of the private sector in the national economy.

Also to be privatized are parts of the metallurgy and fertilizer industries.

Sheikh Hamad told Lebanese Prime Minister Rafiq Hariri his country would take part in an upcoming donors conference aimed at boosting Lebanon's ailing economy, an official here said.

Hariri's government released Thursday a report saying it will be unable to battle its debt crisis without the five billion dollars in aid it hopes to raise at the Paris II Conference on November 23.

It hopes to obtain the funds through a combination of grants and loans at preferential interest rates, while another five billion dollars are to be raised from plans to streamline the tax system and privatize key sectors.

Lebanon's total net public debt is expected to exceed $30 billion by the end of 2002, equivalent to 173 percent of GDP, AFP reported.

Iran resumed on Sunday its exports of gas to turkey, suspended by Ankara since June in a dispute over pricing and after it complained of the quality, Tehran's official news agency IRNA reported.

Turkey is the only country to import Iranian natural and is planning to boost imports. It was supposed to import some four billion cubic meters (140 billion cubic feet) of Iranian gas in 2002.

As for oil prices, Saudi Crown Price Abdullah said that in case any U.S.-led war breaks out against Iraq, the kingdom would continue to work towards stabilizing the supply and prices.

Dubai announced this week a venture to construct a privately-funded Dubai festival city, costing some four billion dollars and taking a decade to build.

At completion it will feature 21,000 homes, corporate office blocks, a 50-storey tower, shopping malls, restaurants and five hotels, one of which will be a resort set on a man-made tropical island in the creek.

Lebanon launched a $459-million project, mainly financed by Kuwaiti donors, to provide drinking and irrigation water to two dozen southern villages from the Litani river.