Daewoo expanded into the construction business, helping the new village movement, a development program for rural Korea. The corporation also capitalized on the growing African and Middle Eastern markets. Daewoo received its GTC designation during 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 South Korea's strict import controls, 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 though the government felt that Hyundai and Samsung had the greater skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard in the world 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 carry out actions based on duty instead of earnings. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really successful corporation producing oil rigs and ships which are competitively priced on a tight production timetable. This took place in the 1980s when South Korea's economy was experiencing a liberalization stage.
The government in this time was lessening its protectionist measures which helped to fuel the rise of small companies and medium-sized companies. Daewoo had to rid two of its textile corporations at this time and the shipbuilding business was beginning to attract more foreign competition. 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 conditions caused some chaebols to fail. One of the competitors of Daewoo, the Kukje Group, went into bankruptcy during 1985. The shift of government favour to small private businesses was intended to spread the wealth that had previously been concentrated in Korea's industrial centers, Seoul and Pusan.