The fact that so many people within nations today are literate and the fact that the world has never been more wealthy in aggregate, is most definitely not a coincidence, for the more people that are able to utilize their language skills, both written and verbal, as well as having fundamentally sound mathematical skills, the more advance civilization becomes. For instance, the island nation, Japan, has remarkably few natural resources, including arable land, but because of its great literacy as well as its strong work ethic, Japan was able to rise from the ashes of World War II, to become the second largest economy in the world.
This would strongly indicate that literacy and the advancement of nations, go hand-in-hand, implying that education for all, should be one of the most basic tenets of any truly civilized nation, but some dictatorial governments, recognize that literacy is most definitely a two-edge sword, for a population that can easily and readily communicate with one another as well as understanding the lay of the land, often results in the masses being far more difficult to control, and therein lies the problem, for an enlightened population may well perceive, relatively easily, that their present-day government is not beneficial and will consequently press for change.
This means, that governments that do not encourage literacy or take away the opportunity for literacy from certain segments of the population, such as females, religious or ethnic minorities, or the poor, deliberately do so, so as to maintain their power, recognizing that an intelligent population, is a population well-armed, making them a clear and present danger to the regular order of things. However, to take the resources of one's mind, and not to develop it, means that the country as a whole will lose productivity, will lose in virtually all areas of advancement, in order to maintain their control, weakening the nation from within, and stymieing the opportunities of growth of the general population, as well as making the uneducated far more dependent upon the generosity of the state.
The reason that certain nations fear literacy is that they fear the free-thinking of liberated minds, competing against the unfairness of a country ruled by a privileged class for the primary benefit of that class, which exploits the underclass in order to enrich themselves, at the expense of that underclass. The thing about literacy is that literacy in all of its many aspects is the very best way for those that lack material things as well as present-day opportunities, to obtain the very things that they lack, by applying themselves diligently to that task, which is why it is feared, because of the then governmental perceived lack of control of this individual resource, and dictatorial regimes are all about maintaining order and control.
Then too, the other downside of literacy for nations, is the fact, that those that become literate with little or no moral structure, may decide to utilize their skill set in a manner that benefits them in a selfish way, at the expense of others, even literate others, that aren't as perceptive, diabolical, or intelligent. This implies that great nations make it a point to not only educate their population but to indoctrinate them in the ways that a good citizen should think and behave, so that through the checks and balances of societal norms, good citizens are ever alert to those that would unfairly usurp what is rightfully theirs.