Daewoo expanded into the construction sector, helping the new village movement, a development program for rural Korea. The company also capitalized on the burgeoning African and Middle Eastern markets. Daewoo received its GTC designation during this time. The South Korean government provided major investment assistance to the company in the form of subsidized loans. The strict import controls of South Korea angered competing nations, but the government knew that, without help, the chaebols will never survive the global recession caused by the 1970's oil crisis. Protectionist policies were essential to ensure that the economy continued to grow.
Even if the government felt that Samsung and Hyundai had the better knowledge in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the globe was not a responsibility that Kim was wanting. He stated many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility rather than earnings. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company producing competitively priced ships and oil rigs on a tight production timetable. This took place in the 1980s when South Korea's economy was going through a liberalization stage.
The government during this time was reducing its protectionist measures which 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 business was beginning to attract more foreign competition. The government's objective 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. Then again, the new economic climate caused some chaebols to fail. One of Daewoo's competitors, the Kukje Group, went into liquidation in the year 1985. The shift of government favour to small private businesses was meant to spread the wealth which had previously been concentrated in Seoul and Pusan, Korea's industrial centers.