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 capitalize on the growing markets within the Middle East and within Africa. Daewoo received its GTC designation during this time. The government of South Korea provided major investment help to the company in the form of subsidized loans. The competing nations were angered by South Korea's strict import controls, but the government knew that, independently, the chaebols would never survive the global recession caused by the oil crisis in the 1970s. Protectionist policies were needed to make certain that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even if Kim felt that Samsung and Hyundai had greater skill in heavy engineering and was more suitable to shipbuilding than Daewoo. Kim did not want to take responsibility for the largest dockyard within the world, at Okpo. He said lots of times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility rather than earnings. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company manufacturing oil rigs and ships that are competitively priced on a tight production timetable. This took place in the 1980s when the economy in South Korea was going through a liberalization stage.
The government during this time was lessening its protectionist measures which helped to fuel the rise of small businesses and medium-sized companies. Daewoo had to rid two of its textile corporations at this time and the shipbuilding industry was beginning to attract more foreign competition. The objective of the government was to shift to a free market economy by encouraging a more efficient allocation of resources. Such a policy was intended to make the chaebols more aggressive in their global dealings. Nonetheless, the new economic climate caused some chaebols to fail. The Kukje Group, one of Daewoo's competitors, went into liquidation during the year 1985. The shift of government favour to small private businesses was intended to spread the wealth which had before been concentrated within Korea's industrial centers, Seoul and Pusan.