Daewoo moved into the construction business, helping to create the new village movement, which was a part of the rural development program in Korea. The company was also able to capitalize on the emergent markets in the Middle East and in Africa. Daewoo received its GTC designation during this time. The government of South Korea offered major investment support to the corporation in the form of subsidized loans. The competing countries were angered by the strict import controls of South Korea, but the government knew that, unaided, the chaebols will never endure the world recession caused by the oil crisis in the 1970s. Protectionist policies were needed to make certain that the economy continued to grow.
Even though the government felt that Hyundai and Samsung had the better skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard in the globe was not a responsibility which Kim was wanting. He stated many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of profit. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful corporation making competitively priced oil rigs and ships on a tight production schedule. This happened during the 1980s when South Korea's economy was experiencing a liberalization stage.
Throughout this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized companies. Daewoo was forced to rid two of its crucial textile companies, and its shipbuilding industry faced stiffer competition from overseas. The government's objective was to shift to a free market economy by encouraging a more effective allocation of resources. Such a policy was meant to make the chaebols more aggressive in their international dealings. Nevertheless, the new economic conditions caused some chaebols to fail. Among the competitors of Daewoo, the Kukje Group, went into liquidation during 1985. The shift of government favour to small private businesses was meant to spread the wealth which had previously been concentrated within Korea's industrial centers, Seoul and Pusan.