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This led to yellow fever being eradicated by November 1905, as well malaria rates falling dramatically.However, most of the laborers for the construction of the canal were brought in from the Caribbean, which created unprecedented racial and social tensions in the city.This traffic greatly increased the prosperity of the city during that period.The construction of the Panama Canal was of great benefit to the infrastructure and economy.Shipping is handled through port facilities in the area of Balboa operated by the Hutchison Whampoa Company of Hong Kong and through several ports on the Caribbean side of the isthmus.Balboa, which is located within the greater Panama metropolitan area, was formerly part of the Panama Canal Zone, and the administration of the former Panama Canal Zone was headquartered there.

On January 28, 1671, the original city (see Panamá Viejo) was destroyed by a fire when privateer Henry Morgan sacked and set fire to it.At the Pacific entrance of the canal is the Centro de Exhibiciones Marinas (Marine Exhibitions Center), a research center for those interested in tropical marine life and ecology, managed by the Smithsonian Tropical Research Institute.Tropical forests around Panama are vital for the functioning of the Panama Canal, providing it with the water required for its operation.The city was formally reestablished two years later on January 21, 1673, on a peninsula located 8 km (5 miles) from the original settlement.The site of the previously devastated city is still in ruins.

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