Balado is not just a sauce; it's a cooking technique where the chili paste (chili, shallots, garlic) is flash-fried to gain a complex flavour. The chicken is pre-boiled in turmeric water and then fried for crispiness before adding the sauce.
Boil the chicken pieces in a pot with water, salt, and turmeric for about 10 minutes. The chicken should not be fully cooked, only partially.
Remove the chicken and pat it dry. Heat sufficient oil in a pan and fry the chicken until golden brown. Set it aside on a napkin.
Prepare the Balado paste: Blanch the chili, shallots, garlic, and tomato in hot water for 2 minutes to soften them.
Drain the vegetables and blend/chop them coarsely in a mortar. It should not be a smooth purée, but rather a roughly chopped mixture.
Heat 3-4 tbsp of oil in the pan (ideally the one used for frying the chicken) and add the Balado paste. Fry over medium heat for 10-15 minutes until the sauce darkens and becomes fragrant.
Add salt, palm sugar, and kaffir lime leaves. Stir until the sugar is dissolved.
Add the fried chicken pieces to the pan with the Balado sauce.
Gently toss the chicken until it is evenly coated with the sauce. Do not cook for too long—the sauce should just cling to the chicken.
Serve hot with white rice (Nasi).