Daewoo expanded into the construction sector, serving a development program for rural Korea, the new village movement. The company also capitalized on the burgeoning Middle Eastern and African markets. Daewoo received its GTC designation at this time. Major investment help was provided 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 endure the global recession caused by the 1970's oil crisis. Protectionist policies were essential to make sure that the economy continued to grow.
Even if the government felt that both Samsung and Hyundai had the better knowledge in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the globe was not a responsibility which Kim was wanting. He stated numerous times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of profit. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful company producing competitively priced oil rigs and ships on a tight production timetable. This took place during the 1980s when the economy in South Korea was going through a liberalization stage.
During 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 companies, and its shipbuilding industry faced stiffer competition from overseas. The goal of the government was to shift to a free market economy by encouraging a more efficient allocation of resources. Such a policy was meant to make the chaebols more aggressive in their global dealings. However, the new economic climate caused some chaebols to fail. Among the competitors of Daewoo, the Kukje Group, went into liquidation in 1985. The shift of government favour to small private businesses was meant to spread the wealth which had before been concentrated in Pusan and Seoul, Korea's industrial centers.