Daewoo moved into the construction sector, helping to make the new village movement, which was a part of the rural development program in Korea. The company was also able to take advantage of the emergent markets within the Middle East and in Africa. Daewoo received its GTC designation at this time. The South Korean government provided major investment assistance to the company in the form of subsidized loans. The strict import controls of South Korea angered competing countries, but the government knew that, unaided, the chaebols will never endure the world recession caused by the oil crisis in the 1970s. Protectionist policies were essential to make certain that the economy continued to grow.
Even if the government felt that both Hyundai and Samsung had the greater skill 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 said a lot of times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility instead of profit. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful corporation making competitively priced ships and oil rigs on a tight production timetable. This took place in the 1980s when South Korea's economy was going through a liberalization stage.
The government throughout this time was lessening its protectionist measures which helped to fuel the rise of small businesses and medium-sized companies. Daewoo had to rid two of its textile companies at this time and the shipbuilding industry was starting to attract more foreign competition. The government's objective 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 international dealings. However, the new economic climate caused some chaebols to fail. The Kukje Group, one of the competitors of Daewoo, went into bankruptcy during 1985. The shift of government favour to small private businesses was meant to spread the wealth that had before been concentrated in Seoul and Pusan, Korea's industrial centers.