Daewoo moved into the construction sector, helping to create the new village movement, which was a part of the rural development program in Korea. The company was also able to capitalize on the growing markets within the Middle East and within Africa. Daewoo was given its GTC designation at this time. Major investment assistance was offered by the government of South Korea to the corporation in the form of subsidized loans. South Korea's strict import controls angered competing countries, but the government knew that, unaided, the chaebols will never survive the global recession caused by the oil crisis in the 1970s. Protectionist policies were required to ensure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even though Kim felt that both Samsung and Hyundai had greater expertise in heavy engineering and was more suitable to shipbuilding compared to Daewoo. Kim did not want to assume responsibility for the largest dockyard in the world, at Okpo. He said many times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility rather than revenue. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company making oil rigs and ships which are competitively priced on a tight production schedule. This happened in the 1980s when the economy in South Korea was going through a liberalization stage.
The government throughout this time was reducing its protectionist measures that helped to fuel the rise of small businesses and medium-sized companies. Daewoo had to rid two of its textile corporations at this time and the shipbuilding business was beginning to attract more foreign competition. The objective 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 worldwide dealings. However, the new economic climate caused some chaebols to fail. Amongst Daewoo's competitors, the Kukje Group, went into liquidation during the year 1985. The shift of government favour to small private companies was intended to spread the wealth that had before been concentrated in Seoul and Pusan, Korea's industrial centers.