Daewoo moved into the construction sector, helping to create the new village movement, that was a part of Korea's rural development program. The corporation was also able to capitalize on the emergent markets in the Middle East and within Africa. Daewoo was given its GTC designation at this time. The South Korean government provided major investment support to the corporation in the form of subsidized loans. The competing nations were angered by the strict import controls of South Korea, but the government knew that, without help, the chaebols will never survive the world recession caused by the 1970's oil crisis. Protectionist policies were essential to ensure that the economy continued to grow.
Even if the government felt that both Samsung and Hyundai had the better skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the world was not a responsibility that Kim was wanting. He said many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of revenue. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable company making competitively priced ships and oil rigs on a tight production timetable. This took place during the 1980s when South Korea's economy was experiencing 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 crucial textile companies, 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 meant to make the chaebols more aggressive in their global dealings. Then again, the new economic conditions caused some chaebols to fail. The Kukje Group, amongst Daewoo's competitors, went into liquidation during 1985. The shift of government favour to small private businesses was meant to spread the wealth which had before been concentrated in Pusan and Seoul, Korea's industrial centers.