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 take advantage of the emergent markets within the Middle East and within Africa. Daewoo was given its GTC designation during this time. The South Korean government provided major investment assistance to the corporation in the form of subsidized loans. The competing countries were angered by the strict import controls of South Korea, but the government knew that, without help, the chaebols will never endure the global recession caused by the oil crisis during the 1970s. Protectionist policies were needed to make sure 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 greater expertise in heavy engineering and was more suitable to shipbuilding than Daewoo. Kim did not want to assume responsibility for the biggest dockyard within the world, at Okpo. He stated many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on duty instead of profit. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable corporation producing competitively priced oil rigs and ships on a tight production schedule. This happened in the 1980s when the economy in South Korea was experiencing a liberalization stage.
The government during this time was lessening its protectionist measures that helped to fuel the rise of small businesses and medium-sized businesses. Daewoo had to divest two of its textile corporations at this time and the shipbuilding industry was starting 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 international dealings. Then again, the new economic climate caused some chaebols to fail. One of the competitors of Daewoo, the Kukje Group, went into liquidation during 1985. The shift of government favour to small private companies was intended to spread the wealth that had before been concentrated within Korea's industrial centers, Seoul and Pusan.