Daewoo moved into the construction sector, helping to create 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 in Africa. Daewoo received its GTC designation at this time. Major investment help was provided by the government of South Korea to the company in the form of subsidized loans. The strict import controls of South Korea angered competing countries, but the government knew that, independently, the chaebols would never survive the global recession caused by the 1970's oil crisis. Protectionist policies were essential to ensure that the economy continued to grow.
Even though the government felt that Hyundai and Samsung had the greater skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the globe was not a responsibility which Kim was wanting. He said lots of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than revenue. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable corporation producing competitively priced ships and oil rigs on a tight production timetable. This took place in the 1980s when the economy within South Korea was going through a liberalization stage.
The government in 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 industry was starting to attract more foreign competition. The government's goal 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. Nevertheless, the new economic conditions caused some chaebols to fail. Among the competitors of Daewoo, the Kukje Group, went into bankruptcy during the year 1985. The shift of government favour to small private businesses was intended to spread the wealth which had previously been concentrated in Korea's industrial centers, Pusan and Seoul.