Daewoo moved into the construction sector, helping to make the new village movement, which was a part of Korea's rural development program. The corporation was also able to take advantage of the growing markets within the Middle East and in Africa. Daewoo received its GTC designation at this time. Major investment help was provided by the government of South Korea to the company 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 world recession caused by the oil crisis in the 1970s. Protectionist policies were essential to make certain 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 knowledge in heavy engineering and was more suitable to shipbuilding than Daewoo. Kim did not want to assume responsibility for the largest dockyard within the world, at Okpo. He stated lots of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of profit. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very profitable company manufacturing 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.
Throughout 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 crucial textile corporations, and its shipbuilding industry faced stiffer competition from overseas. The government's goal 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. Nevertheless, the new economic conditions caused some chaebols to fail. Amongst Daewoo's competitors, the Kukje Group, went into liquidation in 1985. The shift of government favour to small private companies was intended to spread the wealth that had previously been concentrated within Seoul and Pusan, Korea's industrial centers.