Soak dried chilies in hot water for 15 minutes and deseed. Into a blender, put all ingredients except the shrimp paste and blend until mixed well. Then, add the shrimp paste and blend once more to obtain about 1/2 cup of a fine-textured paste.
This can be stored in a glass jar in the refrigerator for 3-4 months.
(Note: Krachai is related to ginger and galangal, and usually used in fish dishes.) Recipe from: The Elegant Taste of Thailand, by Sisamon Kongpan & Pinyo Srisawat.