The designation of former representative Barber B. Conable -- a politician and not a banker -- as president of the World Bank tells us a good deal about the urgent need to reconstruct that institution in a way that can help it play a leading role in resolving the Third World debt crisis.

On the one hand, Conable must deal with a Congress reluctant to appropriate money for "foreign aid." On the other hand, he must negotiate with the political leaders of debtor nations such as Mexico, who must reform their messed-up economies, so as to justify additional lending, and still stay in office.

In that sense, the choice of Conable is brilliant, and a relief considering some of the other possibilities. In the current environment, the bank presidency calls for political savvy. Conable's best qualification is that he has more of that at his fingertips after 20 years in Congress than any of the private bankers who had been prominently mentioned as successors to the current president, A. W. (Tom) Clausen.

But only time will tell whether the dignified and highly regarded Conable, who is not an expert in Third World debt or in the broader development needs of poor countries, will be able to evoke and symbolize a clear, strong vision of what the bank's role ought to be.

In the past five years under Clausen, the bank suffered because of the Reagan administration's initial misperceptions and distrust. The Treasury in 1981 was obsessed with the idea that the bank was bent on underwriting "socialism" around the world. Other Reagan advisers were so determined to cultivate bilateral relationships that they ignored the critical nature of the bank's multilateral role.

That has changed. Treasury Secretary James A. Baker III last week was touting the "big bang for a buck" this country gets for the piddling amounts it puts into the World Bank: the Bank can lend $60 for every $1 the United States contributes.

But it wasn't just the first Reagan Treasury that undercut Clausen's ability to perform: many in Congress came to view the bank as a sort of international welfare agency, a financial backer of sometimes ludicrous projects, rather than a growth-oriented development agency.

A senior administration official once told me: "My personal opinion is that for the bank to survive and flourish, it has to be perceived as an agency that is promoting economic growth over the long term rather than being perceived as a welfare agency."

Rep. Stan Lundine (D-N.Y.), who heads a House banking subcommittee on these matters, told me after the Conable appointment (which he applauds) that the former legislator's first task will be to define what role the bank is going to play for the rest of this decade and into the '90s.

"Essentially, the bank has been involved in lending for major projects in developing countries," Lundine said. But now, Lundine said, it has to make loans that will restructure the huge debt overhang, be a catalyst for additional private loans and make World Bank/IMF cooperation into something more than lip service.

The latter could be Conable's biggest and most important long-range task. As Deputy Treasury Secretary Richard Darman points out, the IMF was set up to handle and finance short-term loans. Yet, when little help came from the bank under Clausen in the wake of the first debt crisis in 1982, the IMF was forced to deal alone with problems that could be solved only over a long time. "You cannot long sustain austerity programs alone," Darman said.

So the new scenario that the Reagan administration looks for under Conable is a loan program supplementing the IMF effort, and worked out jointly, that can begin to provide hope of long-term growth. Under the so- called Baker debt initiative, the combined IMF/World Bank operations would be helped along by free-market-type reforms in the borrowing countries that will attract increased commercial bank lending.

Without growth, such countries as Mexico, Brazil and Argentina will be mired in debts that will never be repaid. And without that growth, American exports (and jobs) that used to yield U.S. trade surpluses cannot possibly recover.

Lundine wisely observes that it's one thing for the United States to sketch out this scenario and another for the bank to commit itself to make the necessary changes. This will require not just the substitution of Conable for Clausen, but a change in the character of the entire bank bureaucracy.

Can Conable and the bank move quickly enough? It will be hard work for both. As Lundine observes, the bank has been rigid, its bureaucracy bloated. The skills needed to administer project loans that have been the bank's stock-in-trade differ from the political and macroeconomic skills needed when persuading Third World countries to make the economic changes that symbolize the so-called Baker debt initiative.

Conable will be under great pressure to revise not only tone and style, but substance and direction at the bank. No one can envy him the formidable task he faces, but all can salute his willingness to return to the public sector for a try.