THE International Monetary Fund (IMF) and the World Bank have been thrust onto the center stage of world affairs.
The top industrial nations have given the two multilateral institutions the lead role in helping Russia and the other 14 former Soviet republics switch their economies to a free-market system.
"The fund and the bank have recently gained enormous prestige," says Edward Bernstein, a Brookings Institution economist who was part of the United States delegation at the creation of these two institutions at Bretton Woods, N.H., in 1944.
Yesterday, the policymaking committee of the IMF was voting to accept the 15 former Soviet republics as members. When this process is completed sometime in May, the fund will have 171 members, becoming a global institution embracing nearly every nation.
Some days or weeks after that, the republics will be accepted into membership in the bank - the world's largest provider of loans for development programs and projects.
The Soviet Union was at Bretton Woods but Stalin decided not to join the two institutions. Thus for decades, the USSR and most of its Comecon allies remained outside the noncommunist economic and financial establishment.
Now the two institutions are expected to manage loans of well over $100 billion to the republics over the next four years.
"It's a huge gamble," says Frank Vogl, a former chief spokesman for the World Bank, and now a consultant. "The US in a dozen years has come from a position of vilifying these institutions to giving them a central role in the implementation and funding of American foreign policy."
In 1980, the Reagan administration moved to downgrade the bank and fund. They were charged with supporting socialism in developing countries. The Reagan treasury held that emphasis on bilateral foreign aid would give the US more political clout.
When the international debt crisis started in 1982, the IMF, in its role as a provider of loans for nations with severe international payments problems, came to the rescue. US criticism began to fade. Now, the Group of Seven industrial nations has chosen the fund and bank as a surrogate for transforming the ex-Soviet republics for several reasons:
* It enables the Seven (US, Japan, Germany, France, Britain, Italy, and Canada) to seek a consensus on policy, first among themselves, before presenting a position to the republics.
As is normal when the IMF lends money, it will insist on economic reforms by the republics. This means the G-7 does not directly demand changes in the republics, thereby skirting the political hazards arising from one nation insisting on internal reforms in another nation.
* The financial burden can be divided in proportion to these nations' shares of the IMF funding, which means that the US provides just under one-fifth of the amount needed from the IMF.
* The G-7 can avoid national budget restrictions to a considerable degree by using the IMF and the bank to make loans to the republics. The bank obtains its money by borrowing from private financial markets. The IMF is mostly funded through the quotas of its members. The political process of getting those IMF quota funds can be less difficult for the G-7 than a straight vote in a national legislature for foreign aid.
HAVING been given the role of vitalizing the economies of the former Soviet bloc, what the IMF and bank "do or don't do in the 1990s is extraordinarily crucial," notes John Sewell, president of the Overseas Development Council, a Washington think tank.
As a financial boost to the IMF, the G-7 and four other European countries were expected yesterday to approve use of the General Arrangements to Borrow (GAB) - a special line of credit established for the IMF in 1962 by the world's richest nations.
The GAB was last activated in 1983 at the height of the developing-country debt crisis. The GAB money is to be used for a $6 billion stabilization fund for the ruble - should Russia and other republics still using the ruble get their fiscal policies in order to satisfy the IMF.
Of the $100 billion or so to be loaned to the republics in the next four years, about $25 billion to $35 billion will come from the fund and bank. The IMF expects to loan about $2.5 billion this year to the republics, half of which will go to Russia. Loan commitments should build to an annual level of $4.5 billion to $5 billion for the fund's fiscal year starting in July 1994, says Wilfried Thalwitz, a high IMF official.
The bank anticipates making its first loan - about $500 million - to Russia in the summer. It will be for the purchase of essential imports, such as machine parts, that can help get the economy growing again.
Next will be some smaller loans to the Baltic states, followed by further loans to Russia to boost oil and gas production and improve the agricultural system. By the end of this year, total loan commitments could reach $1.5 billion, says World Bank spokesman Tim Cullen. By the end of 1994, bank loan commitments to the republics could be running between $4 billion and $5 billion a year.