What statistics does one need to understand to know that the correlation on that scatter graph is terrible? Hell you don't even need statistics - just use your eyes.
The fact that the x-axis variable only explains a small amount of the variance in the y-axis does not mean that the effect is not real or not statistically significant. In this case, it's exactly what you would expect, even if the effect is real; surely you don't think it's reasonable that there are no other factors affecting literacy.
Saying "just use your eyes!" instead of actually doing analysis can lead you to all kinds of incorrect conclusions -- both false positives and false negatives.
Saying "just use your eyes!" instead of actually doing analysis can lead you to all kinds of incorrect conclusions -- both false positives and false negatives.