Daewoo moved into the construction sector, helping to make the new village movement, that was a part of the rural development program in Korea. The corporation was also able to capitalize on the growing markets in the Middle East and within Africa. Daewoo was given its GTC designation during this time. Major investment assistance was provided by the South Korean government to the company in the form of subsidized loans. The competing nations were angered by South Korea's strict import controls, but the government knew that, without help, the chaebols will never endure the world recession caused by the oil crisis during the 1970s. Protectionist policies were essential to ensure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even if Kim felt that both Samsung and Hyundai had better skill in heavy engineering and was more suitable to shipbuilding than Daewoo. Kim did not want to assume responsibility for the biggest dockyard in the world, at Okpo. He stated many times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of earnings. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really successful corporation producing oil rigs and ships that are competitively priced on a tight production schedule. This took place during the 1980s when the economy in South Korea 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 business was beginning to attract more foreign competition. The goal of the government 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 worldwide dealings. Then again, the new economic climate caused some chaebols to fail. The Kukje Group, one of the competitors of Daewoo, went into liquidation in 1985. The shift of government favour to small private companies was meant to spread the wealth which had previously been concentrated within Korea's industrial centers, Seoul and Pusan.