Daewoo moved into the construction industry, helping to make the new village movement, which was a part of Korea's rural development program. The company was also able to take advantage of the emergent markets in the Middle East and within Africa. Daewoo received its GTC designation during this time. Major investment help was offered by the South Korean government to the corporation in the form of subsidized loans. The competing nations were angered by South Korea's strict import controls, but the government knew that, without help, the chaebols would never survive the world recession caused by the 1970's oil crisis. Protectionist policies were required to make sure that the economy continued to grow.
Even if the government felt that Samsung and Hyundai had the greater expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the world was not a responsibility that 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 responsibility rather than profit. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really successful company making ships and oil rigs that are competitively priced on a tight production timetable. This happened during the 1980s when the economy within South Korea was experiencing a liberalization stage.
The government in this time was reducing its protectionist measures that helped to fuel the rise of small businesses and medium-sized businesses. Daewoo had to divest two of its textile corporations at this time and the shipbuilding business 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 international dealings. Nevertheless, the new economic climate caused some chaebols to fail. Amongst Daewoo's competitors, the Kukje Group, went into liquidation during the year 1985. The shift of government favour to small private companies was intended to spread the wealth which had previously been concentrated within Korea's industrial centers, Seoul and Pusan.