Daewoo moved into the construction sector, helping to create the new village movement, that 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 was given 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 competing countries were angered by the strict import controls of South Korea, but the government knew that, independently, the chaebols would never survive the global recession caused by the oil crisis during the 1970s. Protectionist policies were required to ensure that the economy continued to grow.
Even though the government felt that both Samsung and Hyundai had the better expertise 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 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 unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable corporation manufacturing competitively priced ships and oil rigs on a tight production timetable. This took place in the 1980s when the economy within South Korea was experiencing a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of medium- and small-sized companies. Daewoo was forced to rid two of its crucial textile corporations, and its shipbuilding industry faced stiffer competition from overseas. The government's objective 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. However, the new economic conditions caused some chaebols to fail. The Kukje Group, one of the competitors of Daewoo, went into liquidation during the year 1985. The shift of government favour to small private companies was meant to spread the wealth that had before been concentrated in Korea's industrial centers, Pusan and Seoul.