Daewoo expanded into the construction sector, helping the new village movement, a development program for rural Korea. The corporation also capitalized on the burgeoning Middle Eastern and African markets. Daewoo received its GTC designation at this time. The South Korean government offered major investment assistance to the company 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 will never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to make certain that the economy continued to grow.
Even if the government felt that both Hyundai and Samsung had the better expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in the globe was not a responsibility that Kim was wanting. He said numerous times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than revenue. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful company producing competitively priced ships and oil rigs on a tight production schedule. This happened in the 1980s when South Korea's economy was experiencing a liberalization stage.
The government during this time was reducing its protectionist measures that helped to fuel the rise of small companies and medium-sized businesses. Daewoo had to divest two of its textile companies at this time and the shipbuilding business was starting to attract more foreign competition. The objective 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 global dealings. However, the new economic conditions caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into bankruptcy in the year 1985. The shift of government favour to small private companies was meant to spread the wealth that had before been concentrated in Korea's industrial centers, Pusan and Seoul.