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 Judges, including boxer Kostya Zu, asked the 29 finalists questions ranging from how they would improve the nation and who they would have invited to the 2020 Summit.
Answering a question about helping the world's environment, Ms Dundovic said people should "use less hairspray".
As well as her views on world peace, the psychology student showed off her other attributes in evening wear and skimpy bikinis.
"It would be great to reach the success of my predecessors, but at the moment I am the over the moon to be here," Ms Dundovic told News Ltd.
Miss Universe Australia national director Deborah Miller said the success of past winners Jennifer Hawkins and Erin McNaught had boosted the event's prfile.
More than 4800 women contested this year's event.
Ms Dundovic will respresent Australia in the international final in Vietnam in July. Cheerleader Jennifer Hawkins won the Australian title in 2004 and collected the Miss Universe title in Ecuador later that year. Since then, the 24-year-old is estimated to have earned more than $12 million while becoming one of Australia's most recognisable faces.
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 It was a night of sweet vindication for Karla Paula Henry who was chosen Miss Philippines-Earth 2008 on Sunday, besting 40 contestants from all over the country and Filipino communities abroad.
The 22-year-old model from Cebu joined the Binibining Pilipinas pageant in March but failed to advance to the semifinal round.
On Sunday night, she not only bagged the P250,000 prize, she will represent the Philippines in the Miss Earth contest where she will compete with 90 international delegates.
For two years now, the Miss Philippines-Earth pageant has crowned women who failed to win in the Binibining Pilipinas contest.
Jeanne Harn, last year’s Miss Philippines-Earth, had joined Binibining Pilipinas in 2004 and lost.
Henry will serve as ambassadress of the environment and is expected to take on projects and activities seeking to save the earth.
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 Tickets for the pageant’s Presentation Show, Dress Rehearsal and Final Show can be booked at locations across the country.
“This is the first time Vietnam has hosted the Miss Universe pageant and the three shows are considered the most important events of the pageant,” said Miss Universe Organizing Board Vice Chairman Nguyen Quoc Toan. “We hope the pageant will bring everyone unforgettable experiences from the world’s leading beauty pageant.” This year’s pageant will be held at the Crown Convention Center, Diamond Bay in the beach resort town of Nha Trang in Khanh Hoa Province. The Presentation Show will take place on July 8. Over 80 contestants will compete in swimsuits, evening gowns and traditional clothes.
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 The organisers of Miss Universe pageant are in Vietnam for a two-week work trip to prepare for Miss Universe 2008 pageant.
Leading the high-ranking expert group of Miss Universe Organisation (MUO) is Vice Chairwoman Rachel Frimer. The group worked with the Vietnamese organsing board of Miss Universe 2008 on the construction pace of the Crown Convention Centre and other preparation tasks. According to the Vietnamese partner, 80% of the Crown Convention Centre is completed and equipment installation will begin in early June. “We are working day and night and will complete the Crown Convention Centre in late May as scheduled,” affirmed James Dunne, MUO’s Design Manager cum Construction Supervisor in Vietnam.
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