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 emergent markets in the Middle East and within Africa. Daewoo received its GTC designation during this time. The South Korean government provided major investment help to the company 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 would never survive the global recession caused by the 1970's oil crisis. Protectionist policies were necessary to ensure that the economy continued to grow.
Even if the government felt that Samsung and Hyundai had the better expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in the world was not a responsibility that Kim was wanting. He stated numerous times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of revenue. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really successful corporation making competitively priced oil rigs and ships on a tight production timetable. This took place during the 1980s when the economy within South Korea was going through a liberalization stage.
During this period, the government relaxed its protectionist measures and encouraged the existence of medium- and small-sized businesses. Daewoo was forced to rid two of its important 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 efficient allocation of resources. Such a policy was meant to make the chaebols more aggressive in their worldwide dealings. Nevertheless, the new economic climate caused some chaebols to fail. The Kukje Group, one of the competitors of Daewoo, went into liquidation during 1985. The shift of government favour to small private companies was intended to spread the wealth that had before been concentrated within Korea's industrial centers, Seoul and Pusan.