Daewoo moved into the construction industry, helping to create 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 within the Middle East and within Africa. Daewoo received its GTC designation during this time. The South Korean government offered major investment support to the corporation in the form of subsidized loans. South Korea's strict import controls angered competing nations, but the government knew that, without help, the chaebols will never survive the global recession caused by the oil crisis during the 1970s. Protectionist policies were essential to make sure that the economy continued to grow.
Even though the government felt that Hyundai and Samsung had the better knowledge 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 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 producing competitively priced oil rigs and ships on a tight production schedule. 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 small- and medium-sized companies. Daewoo was forced to rid two of its crucial textile companies, and its shipbuilding industry faced stiffer competition from abroad. 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 global dealings. However, the new economic conditions caused some chaebols to fail. The Kukje Group, among Daewoo's competitors, went into liquidation during the year 1985. The shift of government favour to small private businesses was intended to spread the wealth which had before been concentrated within Pusan and Seoul, Korea's industrial centers.