Daewoo moved into the construction industry, helping to make the new village movement, which was a part of the rural development program in Korea. The corporation was also able to capitalize on the emergent markets within the Middle East and within Africa. Daewoo received its GTC designation at this time. The South Korean government offered major investment support to the company in the form of subsidized loans. The competing nations were angered by the strict import controls of South Korea, but the government knew that, without help, the chaebols will never survive the world recession caused by the oil crisis in the 1970s. Protectionist policies were needed to make sure that the economy continued to grow.
Even if the government felt that Samsung and Hyundai had the better skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the world was not a responsibility which Kim was wanting. He said a lot of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility rather than profit. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful company making ships and oil rigs that are competitively priced on a tight production schedule. This happened during the 1980s when South Korea's economy was going through a liberalization stage.
The government throughout this time was lessening its protectionist measures which helped to fuel the rise of small businesses and medium-sized companies. Daewoo had to divest two of its textile corporations at this time and the shipbuilding industry was beginning to attract more foreign competition. The objective of the government 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. Nonetheless, the new economic conditions caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into liquidation in the year 1985. The shift of government favour to small private companies was meant to spread the wealth which had before been concentrated within Pusan and Seoul, Korea's industrial centers.