Daewoo moved into the construction sector, helping to create the new village movement, which was a part of Korea's rural development program. The company was also able to capitalize on the emergent markets in the Middle East and in Africa. Daewoo was given its GTC designation during this time. The government of South Korea offered major investment help to the company in the form of subsidized loans. The strict import controls of South Korea angered competing nations, but the government knew that, independently, the chaebols will never survive the world recession caused by the oil crisis in the 1970s. Protectionist policies were necessary to ensure that the economy continued to grow.
Even though 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 in the globe was not a responsibility that Kim was wanting. He said lots of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of profit. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable company manufacturing competitively priced ships and oil rigs on a tight production schedule. This took place in the 1980s when the economy in South Korea was experiencing a liberalization stage.
The government in this time was reducing its protectionist measures that helped to fuel the rise of small companies and medium-sized companies. Daewoo had to divest two of its textile corporations at this time and the shipbuilding business was starting to attract more foreign competition. 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 intended to make the chaebols more aggressive in their global dealings. Then again, the new economic climate caused some chaebols to fail. Among the competitors of Daewoo, the Kukje Group, went into liquidation in 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.