Nearly a billion people, two-thirds of them women, will enter the 21st century unable to read a book or write their names,” warns UNICEF in a new report, “The State of the World’s Children 1999.”

UNICEF, the United Nations Children’s Fund, points out that the illiterate “live in more desperate poverty and poorer health” than those who can read and write. The shocking number — 1 billion people illiterate — generated frightening headlines in major newspapers.

Poverty in the poorest countries is indeed something that ought to concern all of us, especially in a season when we pause to remember the less fortunate. But as usual, there’s more to this striking statistic than UNICEF tells us. Consider three points.

The Good News. Bad news sells, news watchers tell us. And 1 billion people unable to read and write — about 16 percent of world population — is certainly bad news. But let’s deconstruct the news.

First, UNICEF’s actual number is 855 million, a figure that did not appear in major newspapers. That’s still a large number, but it is 15 percent less than 1 billion.

If the folks at UNICEF really want to improve the lives of the poorest children in the 21st century, they should urge poor-country governments to adopt economic freedom.

More important, UNICEF doesn’t tell the reader whether the trend in illiteracy is positive or negative, though it does assert — with little evidence — that illiteracy rates will grow in the 21st century. If they do, it would represent a startling reversal from the 20th century.

According to UNICEF’s sister organization, UNESCO, the world illiteracy rate was 30.5 percent in 1980 and 22.6 percent in 1995. Indeed, the worldwide illiteracy rate for adults born before 1926 was about 75 percent, declining to 52 percent for those born around 1948, and around 20 percent for the 1970 cohort. That is remarkable progress, which should be remembered when we read the 1999 UNICEF report.

Cart before the Horse. UNICEF properly notes that we should worry about illiteracy not just for its own sake, but because it contributes to poverty. “Without an education, people cannot work productively, care for their health, sustain and protect themselves and their families or live culturally enriched lives.”

True enough. But the relationship between education and economic growth is complicated. African capitals are full of college-educated people who can produce very little in their corrupt, statist economies. Western Europe, North America, and Hong Kong all saw rapid economic growth before education became widespread. Prosperous people can afford to give their children more education.

Communist countries seem to have good records at teaching their people to read and write — the better to absorb party propaganda, perhaps. But their high literacy rates obviously did not pull the communist countries out of poverty.

On the other hand, the relationship between economic freedom and prosperity is straightforward: in almost every case, historical and contemporary, more economic freedom leads to more growth. In Economic Freedom of the World 1997, published by the Fraser Institute in Vancouver, economists James Gwartney and Robert Lawson rate 115 countries on 17 components of economic freedom — stable money, free trade, property rights, low taxes, an absence of conscription, the rule of law, and so on. They find a very close relationship between economic freedom and per capita GDP. Countries in the top quintile — that is, the 23 countries that are most free–have a per capita GDP of $14,829. Those in the second quintile have a per capita GDP of $12,369. From there it drops rapidly: third quintile, $6,385; fourth quintile, $3,057; fifth quintile — the least free countries — $2,541.

It’s the people in those latter groups that UNICEF is rightly worried about. If the folks at UNICEF really want to improve the lives of the poorest children in the 21st century, they should urge poor-country governments to adopt economic freedom.

Chutzpah. The report is signed by Carol Bellamy, executive director of UNICEF, who says, “Education is literally a matter of life and death.”

Back in May 1998, the same Ms. Bellamy visited Afghanistan, where the militantly Islamic Taliban government has banned the education of girls. She learned that in some poor Afghan villages women teachers have set up alternative schools to teach girls without the approval of the government. And in neighboring Pakistan, villagers who are often themselves illiterate are pooling small amounts of money to hire teachers without help from the government in Islamabad.

So Carol Bellamy, concerned about illiteracy and poverty, celebrated these efforts and offered the poor villagers the congratulations of the UN, right? Hardly. Carol Bellamy pooh-poohed their efforts and told them that providing education is the responsibility of central government. “The UN position is not that there is something inherently wrong with home schools,” she told the poor women of Afghanistan. “But if formal education is not supplied by government, a child’s right to schooling is violated. Home schools are not a substitute for formal education.”

A mother in the Afghan city of Jalalabad had the obvious response: “But isn’t a home school better than nothing?”

How can a well-paid UN official, concerned about the prospects of the world’s poorest children, fly halfway around the world to tell poor parents not to educate their children but rather to wait for the central government to get around to it?

It takes a lot of chutzpah to issue a well-publicized report on the dangers of illiteracy in the same year that you discourage the establishment of schools in the world’s poorest villages. The good news is that, Carol Bellamy notwithstanding, the villagers are setting up schools and the world’s literacy rates continue to rise.