Daewoo moved into the construction industry, helping to create the new village movement, that was a part of the rural development program in Korea. The company was also able to take advantage of the emergent markets within the Middle East and within Africa. Daewoo received its GTC designation during this time. The government of South Korea provided major investment support to the corporation in the form of subsidized loans. The competing countries were angered by South Korea's strict import controls, but the government knew that, unaided, the chaebols would never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to ensure that the economy continued to grow.
Even though the government felt that both Samsung and Hyundai had the greater skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the world was not a responsibility that Kim was wanting. He stated many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of profit. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable corporation making ships and oil rigs which are competitively priced on a tight production schedule. This took place in the 1980s when South Korea's economy was experiencing 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 divest two of its crucial textile corporations, and its shipbuilding industry faced stiffer competition from overseas. The goal of the government was to shift to a free market economy by encouraging a more efficient allocation of resources. Such a policy was intended to make the chaebols more aggressive in their worldwide dealings. However, the new economic climate caused some chaebols to fail. The Kukje Group, one of Daewoo's competitors, went into bankruptcy in the year 1985. The shift of government favour to small private companies was meant to spread the wealth that had before been concentrated within Korea's industrial centers, Pusan and Seoul.