Clinton backs Bangladesh microfinance pioneer

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US Secretary of State Hillary Clinton threw her support on Sunday behind microfinance pioneer Muhammad Yunus on a visit to Bangladesh, calling the embattled Nobel laureate a global inspiration.

Clinton invited Yunus, the founder of the Grameen Bank, which provides small loans to the poor, to morning tea before waiting cameras at the US ambassador's residence, a day after she met Bangladesh's bickering political leaders.

With a wide smile, the top US diplomat welcomed Yunus and Fazle Hasan Abed -- the head of the Bangladesh Rehabilitation Assistance Committee (BRAC), a major development group -- and called them "two of my favourite men in the world."

Despite winning the 2006 Nobel Peace Prize and becoming friends with former US president Bill Clinton, Yunus was removed from the helm of his bank last year in a move widely seen as engineered by an envious government.

Hillary Clinton, speaking to students after her meeting with Yunus, said Grameen Bank and BRAC were "viewed internationally as the two best development organisations in the world."

"I can only hope that nothing is done that in any way undermines the success of what Grameen Bank has accomplished on behalf of many millions of poor women," Clinton said to cheers at the International School Dhaka.

Clinton, a staunch advocate of women's empowerment, said that Grameen Bank had uplifted Bangladeshis through the generations, saying she met a woman who was able to attend university after her mother earned a livelihood through a microloan.

"That's the story of America. I want it to be the story of Bangladesh," Clinton said, calling on Bangladesh to preserve Grameen's independence and "unique organisational structure" in which loan recipients themselves are considered owners.

Bangladesh's central bank fired Yunus, 71, in March last year after saying that he had exceeded the mandatory retirement age of 60.

Supporters say the step was retaliation after Yunus previously hinted at joining politics to break the logjam in a country bitterly divided for decades between two political parties.

Clinton is the first secretary of state to visit Bangladesh since 2003. She earlier put off her trip due to concern over Yunus, even though the world's third-largest Muslim-majority country is friendly with the United States.

Clinton met Saturday with both Prime Minister Sheikh Hasina and her arch-nemesis, former prime minister Khaleda Zia, and urged the leaders to put aside their differences for the good of the impoverished country.

"In a strong democracy, everybody has to be rowing in the same direction because you're all in the same boat," she said Saturday at Hasina's office. "We want to see Bangladesh succeed," Clinton said.

But a senior US diplomat, speaking on Sunday on condition of anonymity, acknowledged that the international community has been calling for years on Hasina and Zia to get along, but to little avail.

Asked if the United States was hopeful for progress this time, the US official said: "I can't say there's much progress on that, no. But we wish there was."

Clinton, speaking to students on Sunday, renewed a call for Bangladesh to investigate recent disappearances of activists and abuses against labour.

"You don't want to get a reputation as a place where labour activists are murdered or taken advantage of, because in today's world that will cause big manufacturers of clothing to be afraid to stay or come to Bangladesh," she said.