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 capitalize on the growing markets within the Middle East and within Africa. Daewoo received its GTC designation during this time. Major investment support was offered by the government of South Korea to the company in the form of subsidized loans. The competing nations were angered by South Korea's strict import controls, but the government knew that, unaided, the chaebols would never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to ensure that the economy continued to grow.
Even if the government felt that both Hyundai and Samsung had the better knowledge in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the world was not a responsibility which Kim was wanting. He stated lots of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility rather than earnings. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful company producing oil rigs and ships that are competitively priced on a tight production timetable. This took place during the 1980s when South Korea's economy was experiencing 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 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 meant to make the chaebols more aggressive in their international dealings. Then again, the new economic conditions caused some chaebols to fail. The Kukje Group, one of the competitors of Daewoo, went into bankruptcy in the year 1985. The shift of government favour to small private companies was meant to spread the wealth which had before been concentrated within Pusan and Seoul, Korea's industrial centers.