Daewoo moved into the construction industry, helping to create the new village movement, that was a part of Korea's rural development program. The company was also able to capitalize on the growing markets in the Middle East and in Africa. Daewoo received its GTC designation at this time. Major investment support was offered by the South Korean government to the corporation in the form of subsidized loans. The strict import controls of South Korea angered competing nations, but the government knew that, without help, the chaebols would never survive the global recession caused by the oil crisis during the 1970s. Protectionist policies were needed to ensure that the economy continued to grow.
Even if the government felt that Hyundai and Samsung had the greater expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in the world was not a responsibility which Kim was wanting. He said lots of times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than profit. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful corporation manufacturing competitively priced ships and oil rigs on a tight production timetable. This happened in the 1980s when South Korea's economy was experiencing a liberalization stage.
The government throughout this time was lessening its protectionist measures which helped to fuel the rise of small companies and medium-sized businesses. Daewoo had to divest two of its textile corporations at this time and the shipbuilding business was starting to attract more foreign competition. The goal of the government was to shift to a free market economy by encouraging a more effective allocation of resources. Such a policy was intended to make the chaebols more aggressive in their global dealings. Nevertheless, the new economic climate caused some chaebols to fail. The Kukje Group, amongst Daewoo's competitors, went into liquidation in the year 1985. The shift of government favour to small private businesses was meant to spread the wealth which had before been concentrated in Korea's industrial centers, Seoul and Pusan.