Step 1Make the aji amarillo purée: Halve the peppers lengthwise, removing the seeds and membranes, then dice the peppers. Purée the peppers in a blender with 1 tablespoon olive oil to form a paste. Remove the paste and set aside (there is no need to wash the blender; it will be used again).
Step 2Heat 1 tablespoon oil in a small skillet over medium-low heat. Add the onion and cook, stirring often, until softened but not brown, 5 to 7 minutes. Stir in the garlic and continue cooking until it is aromatic, about 1 minute, then remove the pan from heat and transfer the mixture to a bowl to cool.
Step 3Place the onion mixture in the blender, along with the queso fresco, milk and 1 tablespoon plus 1 teaspoon of the aji amarillo purée, and blend until smooth. If the sauce is too thick, gradually pour in a little milk while blending at low speed. Scrape down the sides of the blender. Blend the sauce again until it is smooth. Taste, and add a pinch of salt and more of the pepper purée if desired. This makes a generous cup of salsa. The salsa can be made up to a day ahead and refrigerated, tightly covered; thin with milk before using if desired.
Step 4Reserve the remaining pepper purée for serving separately, and cover and refrigerate if not using right away.
Step 1Heat the oven to 250 degrees. Have a baking sheet handy and line a tray with paper towels.
Step 2Peel the potatoes. Using a coarse grating or shredding disc of a food processor or the large holes of a grater, grate the potatoes and the onion, alternating potato and onion. Transfer the grated onion and potato mixture to a colander or strainer. Squeeze the mixture by handfuls to remove as much liquid as possible. Transfer the mixture to a bowl.
Step 3In a small bowl, combine the flour, baking powder, salt and white pepper.
Step 4Mix the egg with the grated potatoes and onion. Add the flour mixture and mix thoroughly to combine.
Step 5Heat approximately one-half cup oil in a deep, heavy large skillet over medium heat. Slide 1 heaping tablespoon of potato mixture into the pan, flattening it with the back of a spoon so it is about 2½ inches in diameter, to form a latke. Repeat with more latkes, but be careful not to crowd the pan. Fry the latkes until crisp and golden brown, about 4 minutes per side, flipping them carefully so the oil doesn't splatter. Transfer the cooked latkes to the paper towel-lined tray.
Step 6Repeat with the remaining potato mixture, stirring the potatoes before forming a new batch of latkes. Add additional oil to the pan as needed for frying. Store the cooked latkes on the baking sheet in the warm oven. If the last 2 or 3 spoonfuls of batter are watery, leave the liquid in the bowl to prevent splatters. Pat the tops of the latkes with paper towels before serving. The latkes can be served hot or warm.
Step 7To serve, spoon a little of the salsa and aji amarillo paste onto each plate of latkes, sprinkling over a little chopped parsley. Garnish with a few black olives and a quartered hard-boiled egg segment or two. The latkes can also be arranged for diners to serve themselves, with the condiments and garnishes placed in smaller bowls.