Daewoo moved into the construction business, helping to create the new village movement, that was a part of the rural development program in Korea. The corporation was also able to take advantage of the emergent markets in the Middle East and in Africa. Daewoo received its GTC designation during this time. The South Korean government offered major investment assistance to the company in the form of subsidized loans. The strict import controls of South Korea angered competing nations, but the government knew that, without help, the chaebols will never endure the world recession caused by the oil crisis in the 1970s. Protectionist policies were necessary to ensure that the economy continued to grow.
Even if the government felt that both Hyundai and Samsung had the greater knowledge in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the globe 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 duty instead of revenue. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable company producing competitively priced oil rigs and ships on a tight production schedule. 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 effective allocation of resources. Such a policy was intended to make the chaebols more aggressive in their worldwide dealings. Then again, the new economic climate caused some chaebols to fail. Amongst the competitors of Daewoo, the Kukje Group, went into liquidation in the year 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.