Daewoo moved into the construction business, helping to create the new village movement, that was a part of Korea's rural development program. The corporation was also able to take advantage of the emergent markets in the Middle East and within Africa. Daewoo received its GTC designation at this time. The government of South Korea provided major investment help to the company in the form of subsidized loans. The strict import controls of South Korea angered competing nations, but the government knew that, unaided, the chaebols will never survive the world recession caused by the oil crisis during the 1970s. Protectionist policies were needed to ensure that the economy continued to grow.
Even though the government felt that both Hyundai and Samsung had the greater expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in the globe was not a responsibility which Kim was wanting. He stated many times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than revenue. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful corporation making competitively priced oil rigs and ships on a tight production schedule. This took place in the 1980s when South Korea's economy was going through a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized businesses. Daewoo was forced to divest two of its important 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 international dealings. However, the new economic conditions caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into liquidation in 1985. The shift of government favour to small private companies was meant to spread the wealth that had before been concentrated in Seoul and Pusan, Korea's industrial centers.