Is there any evidence that being unable to do mental arithmetic has any correlation with understanding complicated mathematics?That's a very good question. This question has not been studied as rigorously as it should have been. Here are some suggestive observations. Professor W. Stephen Wilson surveyed many colleagues (other research mathematicians) once to ask if they thought advanced mathematics could be learned without a basic understanding of arithmetic. The responses he received
http://www.math.jhu.edu/~wsw/ED/list
included comments such as "I am shocked that there is any issue here" and "That it is even slightly in doubt is strong evidence of very distorted curriculum decisions" and "One of my favorite attacks is that we are _helping_ the students by insisting that they do things by hand because otherwise they can waste a lot of time when the calculator would fail them." One especially thoughtful comment, by a mathematician who has long thought deeply about teaching mathematics, was "It might be argued that we do not really require students to fiercely add, subtract, multiply and divide in our university courses - which is true. But we do require an automatic understanding of these operations and why they work because WE BUILD FROM THERE."
The longer story about understanding arithmetic--REALLY understanding it--and how that relates to learning beyond arithmetic can be found in the book Knowing and Teaching Elementary Mathematics by Liping Ma
http://www.amazon.com/Knowing-Teaching-Elementary-Mathematic...
(well reviewed by two mathematicians who study mathematics education)
http://www.ams.org/notices/199908/rev-howe.pdf
http://www.aft.org/pdfs/americaneducator/fall1999/amed1.pdf
A classic article on the subject is "Basic skills versus conceptual understanding: A bogus dichotomy in mathematics education"
http://www.aft.org/pdfs/americaneducator/fall1999/wu.pdf
A recent effort to embody strong conceptual understanding of basic skills into a mathematics textbook is Prealgebra by Richard Rusczyk, David Patrick, and Ravi Boppana,
https://www.artofproblemsolving.com/Store/viewitem.php?item=...
which points to what young students should be able to do WITHOUT a calculator if they really understand mathematics well.
One example I know, related to me by an economics professor, is teaching a lecture on economics in which the professor (the one who told me this story) said, as part of a calculation, "20 percent," and then was interrupted by a student who asked, "You just said '20 percent,' but you wrote '.2' on the blackboard. Why did you do that?"