Put the potatoes in a large pot and cover with water by 2 inches. Salt well and bring the water to a boil over medium heat. Reduce the heat to a simmer and cook the potatoes until soft, about 15 minutes. Drain the potatoes, reserving 1 cup of water in a separate bowl. Return the pot to the stove top over medium-high heat. Add the bacon and fry until crisp, then remove it to a paper towel lined plate.
Carefully remove all but 3 tablespoons of bacon fat and return the pot to the heat. Add the garlic, scallions, jalapenos, paprika, salt and freshly ground black pepper, to taste. Cook over medium heat until the scallions and jalapenos are tender, about 3 minutes. Add the flour, and stir until the vegetables are evenly coated, about 2 minutes. Stir in the sugar, vinegar and reserved 1 cup of water. Bring to a boil, then lower the heat and simmer until thickened and slightly reduced, about 3 minutes. Stir in the potatoes and the crispy bacon. Transfer to a serving bowl and serve.