Daewoo expanded into the construction sector, helping the new village movement, a development program for rural Korea. The company also capitalized on the growing Middle Eastern and African markets. Daewoo was given its GTC designation during this time. The South Korean government offered major investment help to the corporation in the form of subsidized loans. The competing countries were angered by South Korea's strict import controls, but the government knew that, without help, the chaebols would never endure the world recession caused by the 1970's oil crisis. Protectionist policies were necessary to ensure that the economy continued to grow.
Even if the government felt that both Samsung and Hyundai had the better skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the globe was not a responsibility which Kim was wanting. He stated a lot of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility instead of revenue. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very profitable company producing ships and oil rigs which are competitively priced on a tight production timetable. This took place in the 1980s when South Korea's economy was going through a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of medium- and small-sized businesses. Daewoo was forced to rid two of its important textile corporations, and its shipbuilding industry faced stiffer competition from abroad. 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 intended to make the chaebols more aggressive in their international dealings. Nonetheless, the new economic conditions caused some chaebols to fail. One of Daewoo's competitors, the Kukje Group, went into liquidation during 1985. The shift of government favour to small private companies was meant to spread the wealth that had before been concentrated in Pusan and Seoul, Korea's industrial centers.