Daewoo moved into the construction business, helping to make the new village movement, which was a part of the rural development program in Korea. The company was also able to take advantage of the growing markets within the Middle East and within Africa. Daewoo received its GTC designation during this time. The South Korean government provided major investment support to the company in the form of subsidized loans. The competing countries were angered by the strict import controls of South Korea, but the government knew that, without help, the chaebols would never endure the global recession caused by the oil crisis in the 1970s. Protectionist policies were essential to make certain that the economy continued to grow.
Even though the government felt that Hyundai and Samsung had the greater expertise 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 stated numerous times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on duty instead of revenue. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really successful company making competitively priced oil rigs and ships on a tight production schedule. This took place in the 1980s when the economy within South Korea was going through a liberalization stage.
The government during this time was reducing its protectionist measures that helped to fuel the rise of small businesses and medium-sized businesses. Daewoo had to rid two of its textile companies at this time and the shipbuilding business was starting to attract more foreign competition. The objective of the government 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 international dealings. Then again, the new economic climate caused some chaebols to fail. One of the competitors of Daewoo, 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 before been concentrated within Korea's industrial centers, Seoul and Pusan.