Daewoo moved into the construction sector, helping to make the new village movement, which 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 in Africa. Daewoo was given 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. The competing countries were angered by the strict import controls of South Korea, 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 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 Hyundai and Samsung had greater skill in heavy engineering and was more suited to shipbuilding than Daewoo. Kim did not want to assume responsibility for the biggest dockyard within the world, at Okpo. He stated a lot of times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of profit. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable company producing ships and oil rigs that are competitively priced on a tight production timetable. This happened during the 1980s when South Korea's economy was experiencing a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized businesses. Daewoo was forced to rid two of its important textile companies, and its shipbuilding industry faced stiffer competition from abroad. 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 worldwide dealings. Then again, the new economic climate caused some chaebols to fail. The Kukje Group, among Daewoo's competitors, went into bankruptcy in 1985. The shift of government favour to small private companies was meant to spread the wealth which had previously been concentrated within Korea's industrial centers, Pusan and Seoul.