Daewoo expanded into the construction sector, helping a development program for rural Korea, the new village movement. The company also took advantage of the growing Middle Eastern and African markets. Daewoo was given its GTC designation at this time. Major investment support 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, independently, the chaebols will never endure the global recession caused by the oil crisis in the 1970s. Protectionist policies were essential to make sure that the economy continued to grow.
Even if the government felt that both Hyundai and Samsung 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 which Kim was wanting. He stated many times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than revenue. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company manufacturing competitively priced oil rigs and ships on a tight production timetable. This happened during the 1980s when the economy in South Korea was going through a liberalization stage.
Throughout this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized businesses. Daewoo was forced to divest two of its important textile companies, and its shipbuilding industry faced stiffer competition from overseas. The government's objective 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. Among Daewoo's competitors, the Kukje Group, went into liquidation during 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.