Daewoo moved into the construction industry, helping to make the new village movement, that was a part of the rural development program in Korea. The company was also able to capitalize on the growing markets within the Middle East and in Africa. Daewoo received its GTC designation during this time. Major investment support was offered by the government of South Korea to the corporation in the form of subsidized loans. South Korea's strict import controls angered competing countries, but the government knew that, unaided, the chaebols will never survive the global recession caused by the oil crisis in the 1970s. Protectionist policies were necessary to make certain that the economy continued to grow.
Even though the government felt that both Hyundai and Samsung had the greater skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the globe was not a responsibility which Kim was wanting. He said numerous times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility rather than profit. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful corporation making competitively priced ships and oil rigs on a tight production schedule. This took place in the 1980s when South Korea's economy was experiencing a liberalization stage.
The government throughout this time was reducing its protectionist measures which helped to fuel the rise of small companies and medium-sized businesses. Daewoo had to rid two of its textile companies 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 intended to make the chaebols more aggressive in their global dealings. However, the new economic climate caused some chaebols to fail. One of Daewoo's competitors, the Kukje Group, went into liquidation in the year 1985. The shift of government favour to small private businesses was intended to spread the wealth which had previously been concentrated within Korea's industrial centers, Seoul and Pusan.