I have been reading up on license laws, and it seems that in all of the countries I have looked up (Singapore, Malaysia, US, UK, Germany) they require you to turn in your foreign driver license, or alternatively retake the driving test in the new country.
What is the rationale of such a law? I was unable to find any indication of the reasons behind such legislation.
Maybe you misunderstood the wording of the laws.
People can use their license to drive in other countries as a visitor. Once you become a permanent resident or stay longer than a set period of time, you must get a local license. Most of the time that's just a formality, you show your original license and you get a new local one for a little fee.
From then on, in that country, you must use their local license. You are not allowed to use your original license. However, that's for that one country. You still got your old license you can still use your old license anywhere else in the world.
The rationale is that each state has a register of their own license holders. They record traffic violations and if or when a license is revoked. So each state makes sure that when you are there for longer, you get to be in their register. They don't want you to just draw your foreign license when you are caught for a violation. And they want to make sure "revoked" means revoked. They cannot revoke other countries licenses, but they can make sure you have to use the local one, the one they can revoke if needed.
As nvoigt says, you can use the home licence as a visitor for a set period of time. In the UK and Canada it is 60 days. Any longer and you need to exchange the licence for the country's. Normally this is a straight exchange, no driving is tested (although they may do a vision test).
When you return to your original licenced country, you use the foreign one for the grace period again, then have to do the exchange the other way.
The rationale for this is simple, if you can keep both, it'd be easy for you to pull out your foreign licence if pulled over, and have any offence lost (these things rarely go back internationally).
For example, in Ireland there was an arrest warrant out for Ireland's worst foreign driver, a Polish man named "Prawo Jazdy"
What they eventually found was that the officers had been recording the info from the foreign licence wrong and that "Prawo Jazdy" means "Driving Licence"
more details here:
