Daewoo moved into the construction business, helping to create the new village movement, which was a part of the rural development program in Korea. The corporation was also able to capitalize on the growing markets in the Middle East and in Africa. Daewoo was given its GTC designation at 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 endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to ensure 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 many 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 profitable company producing oil rigs and ships that are competitively priced on a tight production timetable. This took place during the 1980s when the economy in South Korea was experiencing a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of medium- and small-sized companies. Daewoo was forced to divest two of its crucial textile corporations, and its shipbuilding industry faced stiffer competition from overseas. The objective 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 worldwide dealings. However, the new economic climate caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into liquidation during the year 1985. The shift of government favour to small private businesses was intended to spread the wealth that had before been concentrated in Korea's industrial centers, Pusan and Seoul.