The triennial Aga Khan Award for Architecture, presented last Sunday at the Topkapi Palace in Istanbul, is the biggest money plum in the design world. It is also the most interesting, most inclusive and in many ways the most significant of the world's architecture competitions.

The prize money is important. It has given the 7-year-old program immediate worldwide visibility and it is distributed in an enlightened way to communities, institutions, architects, engineers and local artisans. Winning projects--there were 11 this year, from 9 countries--share $500,000 in award money.

But the organization of the awards program is even more meaningful. Established in 1976 by the Aga Khan, the fabulously wealthy businessman who is spiritual leader of 15 million widely dispersed Ismailian Moslems, the program is endowed with funds sufficient to support the most thoroughgoing kind of on-site analysis of projects that reach the final stage of the selection process (about 30 out of more than 200 nominated projects this time around). This ensures that the award can live up to its own exceptional standards.

In its two award "cycles," as they are called--the initial prizes were given in 1980--the award has proven itself to be unusually reponsive to key, worldwide architectural needs of the late 20th century. No mere fashion contest, the program encompasses broad social needs as well as esthetic finesse, users' responses as well as designers' expertise, homespun local building techniques and materials as well as advanced technology, preservation of the old as well as design and construction of the new.

The list of winners this year, selected by a nine-member international jury, includes an astonishing airport in Saudi Arabia; an ancient palace in Syria; the tomb of a 14th-century mystic in Pakistan; an arts center in Egypt; hotels, residences and tourist facilities in Tunisia and Malaysia; a modest vacation house overlooking a bay in Turkey; restored monuments and homes in a dense quarter of Cairo; a low-cost, large-scale effort to upgrade a decaying residential area in Tunis; and, not least, a striking white mosque in a Yugoslavian village and an equally impressive, though thoroughly different, earthen-textured mud-brick mosque in Mali.

The diversity of building types and regional styles on this list is commendable. Clearly, there was a conscious, consistent effort not to define an all-embracing style. Instead, from beginning to end the awards program focused upon the broadest possible definition of the design process--who financed the buildings and who built them and how and why, and how effectively the structures met the esthetic and functional needs of the people for whom they were designed.

Moslem culture, in the words of the 1980 Aga Khan Award master jury, is only "slowly emerging from a long period of subjugation and neglect in which it had virtually lost its identity, its self-confidence, its very language." In response, the award was set up "to encourage an understanding and awareness of the strength and diversity of Moslem cultural traditions . . . combined with an enlightened use of modern technology for contemporary society." This establishes a best-of-both-worlds philosophy that is at once realistic, in its perception of the world as a complex place, and visionary, in its forward-looking optimism.

Among the award winners, the most dramatic union of the two worlds is the Hajj Terminal in Jeddah, Saudi Arabia--two huge open pavilions designed to accommodate the enormous numbers of Moslems making the annual pilgrimage (hajj) to Mecca. The tentlike roof structures of these pavilions, brilliantly engineered by the late Fazlur Khan of Skidmore, Owings and Merrill, are breathtaking even in photographs. More to the point, the terminal represents "an exceedingly happy union of structural form with an image appropriate to the culture and the climate."

At the other end of the scale in all respects is the Great Mosque of Niono, Mali, an unforgettable mud-brick structure in an arid, poor, almost forgotten corner of the world. This conversion of "a small local mosque into a great monument in the vernacular tradition" was accomplished in four years by Massine Minta, a master mason, assisted by his son and a few other local craftsmen, for a fee equivalent to $345. The prize money was split as follows: $15,000 for the local artisans and $30,000 to the community of Niono.

The jury did not hesitate to criticize this local mason, nor any of the other prize recipients, for esthetic, functional or social shortcomings. Not all of the winning projects were of exceptional esthetic merit, but this willingness to compromise somewhat in the name of a larger definition of architecture seems to have been handled sensibly. In effect, the jury was asked to perform a difficult, delicate task, balancing tradition and innovation, cultural continuity and change, esthetic quality and social need. These basic, conflicting, 20th-century themes have been felt with special force in the Islamic world, but hardly have they been confined to it.

Jaquelin Robertson, dean of the architecture school at the University of Virginia and an outspoken critic of postwar architectural practice in the industrialized world, has observed that the most potent American architectural exports have been "the highway, the commercial strip and the skyscraper"--models that in theory and in fact are tremendously destructive of age-old cultural patterns in Africa, Asia and the Middle East.

As Canadian sage Northrop Frye said in a Smithsonian speech a few years ago, "Culture has something vegetable about it, something that increasingly needs to grow from roots, something that demands a small region and a restricted locale." Frye was speaking mainly about art and literature, but what he said is clearly applicable to the much more visible domain of architecture.

William Porter, professor of architecture and planning at MIT and a member of the steering committee for the Aga Khan Award, comments that in its selections the jury was guided "very much by the notion of cultural fit." In its emphasis upon architectural and environmental context above singular esthetic achievements, the Aga Khan Award jury reflects the most positive elements of recent architectural theory and practice in the industrialized world.

By encouraging and nurturing indigenous architectural culture in the Moslem world--without throwing the baby of technological potential out with the bath water of trashy commercial excess--the award sets an example the rest of the world can learn from.