Daewoo moved into the construction business, helping to create the new village movement, that was a part of the rural development program in Korea. The company was also able to capitalize on the emergent markets within the Middle East and within Africa. Daewoo was given its GTC designation during this time. The South Korean government provided major investment support to the company in the form of subsidized loans. The competing countries were angered by the strict import controls of South Korea, but the government knew that, unaided, the chaebols would never survive the world recession caused by the 1970's oil crisis. Protectionist policies were necessary to ensure 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 largest dockyard in the globe was not a responsibility that Kim was wanting. He stated many times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of revenue. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful corporation making competitively priced oil rigs and ships on a tight production timetable. This happened in 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 small- and medium-sized businesses. Daewoo was forced to divest two of its crucial textile companies, and its shipbuilding industry faced stiffer competition from overseas. 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 climate caused some chaebols to fail. One of Daewoo's competitors, the Kukje Group, went into liquidation in the year 1985. The shift of government favour to small private companies was intended to spread the wealth that had before been concentrated in Korea's industrial centers, Pusan and Seoul.