Daewoo moved into the construction business, 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 growing markets in the Middle East and in Africa. Daewoo received its GTC designation during this time. Major investment help was offered by the government of South Korea to the company in the form of subsidized loans. The competing countries were angered by South Korea's strict import controls, but the government knew that, independently, the chaebols would never survive the world recession caused by the 1970's oil crisis. Protectionist policies were needed to make certain that the economy continued to grow.
Even though 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 in the globe was not a responsibility that Kim was wanting. He said numerous times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of profit. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful corporation producing oil rigs and ships that are competitively priced on a tight production timetable. This happened during the 1980s when the economy in South Korea was experiencing a liberalization stage.
The government throughout this time was lessening its protectionist measures that helped to fuel the rise of small companies and medium-sized businesses. Daewoo had to divest two of its textile companies at this time and the shipbuilding business was starting to attract more foreign competition. The government's objective was to shift to a free market economy by encouraging a more efficient allocation of resources. Such a policy was meant to make the chaebols more aggressive in their global dealings. Then again, the new economic conditions caused some chaebols to fail. One of Daewoo's competitors, the Kukje Group, went into bankruptcy during 1985. The shift of government favour to small private companies was intended to spread the wealth that had before been concentrated within Pusan and Seoul, Korea's industrial centers.